The treasury of a notable cryptocurrency project has been managed through an unconventional setup, with hundreds of millions of dollars in crypto 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 project's other co-founder and core protocol architect. Da estimated that Zhang alone controls around 85% of the assets with a single signature, which has never been transferred to a multi-signature setup or any individual. The native tokens held by Zhang are currently valued between $200 million and $250 million, exceeding the project's $197 million market capitalization.
The two co-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 involves redomiciling the project's 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.
The dispute has led to a stalemate, with each co-founder holding significant leverage over the project's assets and neither willing to concede. Da views his proposal as a form of mutual disarmament, where both he and Zhang would relinquish control over the assets. However, the success of this plan depends on Zhang's cooperation, which remains uncertain.