For several years, the treasury of NEO has been managed in an unconventional manner, with hundreds of millions of dollars in cryptocurrency assets controlled by personal wallets lacking multi-signature protections and formal oversight. According to co-founder Da Hongfei, the individual in control of these assets is Erik Zhang, the other co-founder and architect of NEO's core protocol. Da estimates that Zhang alone controls around 85% of the assets with a single signature, valued between $200 million and $250 million, surpassing NEO's current market capitalization of $197 million.
The two founders have been publicly disputing since December, resulting in competing governance plans and an unsuccessful mediation attempt in Hong Kong. Da has proposed a restructuring plan that involves relocating the Neo Foundation to the Cayman Islands, establishing an independent five-member board, and barring both founders from the board for 24 months. In contrast, Zhang's proposal suggests maintaining the current governance structure and conducting a formal investigation into historical asset management.
The situation has led to a stalemate, with both parties holding significant control over the project's assets and neither willing to compromise. Da views his proposal as a form of mutual disarmament, where both parties would relinquish control over the assets, but the outcome remains uncertain.