For an extended period, the NEO treasury has been managed through an unconventional setup: hundreds of millions of dollars in cryptocurrency assets have been controlled via personal wallets, lacking multi-signature protections and formal oversight. According to co-founder Da Hongfei, this individual is Erik Zhang, the other co-founder and architect of NEO's core protocol. Da stated, 'Approximately 85% of the assets are controlled by Eric alone, with a single signature, and have never been transferred to a multi-signature or any individual.' The native NEO and GAS tokens held by Zhang are currently valued between $200 million and $250 million, as estimated by Da, surpassing NEO's current market capitalization of $197 million. Zhang, on the other hand, has accused Da of separate issues, and the two founders have been publicly airing their disputes since December.
The conflict has resulted in rival governance plans and an unsuccessful mediation effort in Hong Kong. Da published his restructuring proposal on GitHub on April 9, which involves redomiciling the Neo Foundation from Singapore to the Cayman Islands, replacing the current two-founder governance with an independent five-member board, and barring both founders from the board for 24 months. Furthermore, the proposal includes redistributing roughly 26 million NEO and 40 million GAS to token holders. In response, Zhang's counter-proposal suggests maintaining the Foundation's presence in Singapore and keeping himself on the board.
Notably, Zhang's proposal calls for a formal investigation into historical asset management, including provisions to address potential corruption and improper asset transfers. Da dismissed these provisions, stating, 'I think it's a very blunt and empty accusation. There is no corruption, no misuse of funds.' However, some observers find the numbers stark, with NEO's treasury holding approximately $460 million in assets, roughly double the project's market value, while the token has dropped 98% from its 2018 peak.
Da framed his proposal as mutual disarmament, where both he and Zhang would relinquish control over the assets. 'NGD will lose its control over most of the assets, including the BTC and stablecoins, which are over $200 million.
And Eric will lose his personal control of the majority of the NEO tokens,' he said. The outcome depends on Zhang's cooperation, and Da has committed to a one-to-three month timeline for the restructuring process.