For several years, the NEO treasury operated under an unusual setup, with hundreds of millions of dollars in crypto assets controlled through personal wallets, lacking multi-sig protections and formal oversight. According to co-founder Da Hongfei, Erik Zhang, the other co-founder and core protocol architect, holds around 85% of the assets with single signature control, valued between $200 million and $250 million. The native NEO and GAS tokens are currently worth more than the project's $197 million market capitalization. The two founders have been publicly airing their disputes since December, resulting in rival governance plans and an unsuccessful mediation effort.
Da's proposal, published on GitHub, calls for the Neo Foundation to be redomiciled from Singapore to the Cayman Islands, replacing the current two-founder governance with an independent five-member board, and redistributing approximately 26 million NEO and 40 million GAS to tokenholders. In response, Zhang's counter-proposal suggests staying on the board, keeping the Foundation in Singapore, and initiating a formal investigation into historical asset management. Da has dismissed the accusations, stating there is no corruption or misuse of funds.
The project's treasury holds around $460 million in assets, roughly double the project's market value, while the token has dropped 98% from its 2018 peak. Da has proposed a mutual disarmament, where both he and Zhang would sacrifice individual control over assets, with NGD losing control over most assets and Zhang losing personal control of the majority of NEO tokens. The restructuring depends on Zhang's cooperation, and Da has committed to a one-to-three month timeline.
If Zhang refuses, Da believes the community should decide the next course of action.