The treasury of NEO, a cryptocurrency project, has been managed in an unconventional manner, 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 estimates that Zhang alone controls around 85% of the assets, worth between $200 million and $250 million, with single signature authority and without any transfer to multi-sig.
The native NEO and GAS tokens held by Zhang are valued at more than the project's current market capitalization of $197 million. The two founders have been publicly disagreeing since December, leading to rival governance plans and an unsuccessful mediation effort. Da has proposed restructuring the Neo Foundation, including replacing the current two-founder governance with an independent five-member board, redistributing tokens to holders, and relocating the foundation from Singapore to the Cayman Islands. In contrast, Zhang's proposal involves staying on the board, keeping the foundation in Singapore, and conducting a formal investigation into historical asset management to address potential corruption and improper asset transfers.
Da has dismissed these accusations, stating there is no corruption or misuse of funds. The project's treasury holds approximately $460 million in assets, 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 under Zhang's control and the non-token assets managed by NGD, the entity run by Da.
Da's proposal is framed as mutual disarmament, where both he and Zhang would sacrifice individual control over assets. However, the success of this proposal depends on Zhang's cooperation, and Da is uncertain if Zhang is willing to cooperate. If Zhang refuses, Da believes the community should decide the next steps.