For years, the NEO treasury has been held in an unconventional setup, with hundreds of millions of dollars in crypto assets controlled through personal wallets and lacking multisig protections and formal oversight. According to co-founder Da Hongfei, the individual controlling around 85% of the assets, worth between $200 million and $250 million, is Erik Zhang, the other co-founder and architect of NEO's core protocol. Da stated that these assets have never been transferred to a multi-sig or any individual.
The native NEO and GAS tokens held by Zhang are currently valued at more than NEO's $197 million market capitalization. Zhang, on the other hand, has accused Da of separate issues, and the two founders have been publicly disputing since December.
The dispute has led to rival governance plans and an unsuccessful mediation effort in Hong Kong. Da has proposed a restructuring plan, which includes redomiciling the Neo Foundation from Singapore to the Cayman Islands, replacing the current two-founder governance with an independent five-member board, and redistributing roughly 26 million NEO and 40 million GAS to tokenholders. In contrast, Zhang's counter-proposal involves staying on the board and keeping the Foundation in Singapore. Zhang's proposal also calls for a formal investigation into historical asset management, including provisions to address potential corruption and improper asset transfers.
Da has dismissed these accusations, stating that there is no corruption or misuse of funds. However, some observers find the numbers concerning, with NEO's treasury holding around $460 million in assets, roughly double the project's market value, and the token having dropped 98% from its 2018 peak. The treasury is split into two halves, with the native NEO and GAS tokens under Zhang's single-signature control and the non-token assets, including bitcoin, ether, and stablecoins, managed by NGD, the entity run by Da. Da has framed his proposal as mutual disarmament, where both he and Zhang would sacrifice their individual control over assets.
He expressed willingness to do so but is unsure if Zhang is willing. The success of Da's restructuring plan depends entirely on Zhang's cooperation, and if Zhang refuses, Da believes the community should decide the next course of action.