For years, the NEO project's treasury, valued at hundreds of millions of dollars in crypto assets, has been controlled through personal wallets with no multisig protections and little formal oversight. According to co-founder Da Hongfei, this control rests with Erik Zhang, the project's other co-founder and core protocol architect. Da estimates that Zhang holds between $200 million and $250 million worth of NEO and GAS tokens, exceeding the project's current market capitalization of $197 million. The two founders have been publicly airing their disputes since December, resulting in rival governance plans and an unsuccessful mediation effort.
Da has proposed a restructuring plan that includes redomiciling the Neo Foundation to the Cayman Islands, replacing the current two-founder governance with an independent five-member board, and redistributing tokens to holders. In contrast, Zhang's counter-proposal suggests 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 accusations, 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 native tokens controlled by Zhang and non-token assets managed by NGD, the entity run by Da.
Da has framed his proposal as a form of mutual disarmament, where both he and Zhang would relinquish control over assets. However, the success of this plan depends on Zhang's cooperation, and Da has expressed uncertainty about whether Zhang is willing to compromise.