The treasury of the NEO project has been managed in an unconventional manner, with hundreds of millions of dollars in crypto assets controlled through personal wallets without multisig protections or formal oversight. According to co-founder Da Hongfei, the individual in control of these assets is Erik Zhang, the project's other co-founder and core protocol architect. Da estimates that Zhang holds approximately 85% of the assets, valued between $200 million and $250 million, with single-signature control.
The native NEO and GAS tokens held by Zhang are currently worth more than the project's $197 million market capitalization. The two co-founders have been publicly disputing since December, resulting in rival governance plans and an unsuccessful mediation effort in Hong Kong.
Da has proposed a restructuring plan, which includes redomiciling the Neo Foundation to the Cayman Islands, replacing the current governance with an independent five-member board, and redistributing tokens to holders. In contrast, Zhang's counter-proposal involves staying on the board and keeping the Foundation in Singapore, with a focus on investigating historical asset management and addressing potential corruption.
Da has dismissed these allegations, stating that there is no corruption or misuse of funds. The project's treasury holds approximately $460 million in assets, roughly double its market value, with the token having dropped 98% from its 2018 peak. The treasury is split between two halves, with the native tokens controlled by Zhang and the non-token assets managed by NGD, an entity run by Da. Da has framed his proposal as a form of mutual disarmament, where both parties would sacrifice individual control over assets.
However, the success of this plan depends on Zhang's cooperation, and it remains uncertain whether he will agree to transfer the single-signature token holdings to a multisig lock address.