Co-Founder Holds Keys to $200 Million in Crypto, Sparking Governance Debate

For years, the NEO project's treasury has been managed through an unconventional setup, with hundreds of millions of dollars in crypto assets controlled by personal wallets and 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 holds around 85% of the assets, valued between $200 million and $250 million, with single-signature control. The native NEO and GAS tokens are currently worth more than 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 in Hong Kong. Da has proposed a restructuring plan that involves redomiciling the Neo Foundation to the Cayman Islands, establishing 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. Zhang's plan also calls for an investigation into historical asset management, including potential corruption and improper asset transfers. 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 two halves, with the native NEO and GAS tokens under Zhang's 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 a form of mutual disarmament, where both he and Zhang would sacrifice their individual control over assets. However, the success of this plan depends on Zhang's cooperation, and Da has stated that he is willing to move forward but is unsure if Zhang is. If Zhang refuses to cooperate, Da believes that the community should decide the next course of action.