For years, the NEO project's treasury was managed through an unusual setup, with hundreds of millions of dollars in crypto assets controlled by personal wallets and lacking multisig protections or formal oversight. According to co-founder Da Hongfei, the person controlling around 85% of the funds is Erik Zhang, the project's other co-founder and core protocol architect. Da estimates that the native NEO and GAS tokens held by Zhang are currently worth between $200 million and $250 million, exceeding the project's current market capitalization of $197 million. 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's proposal, published on GitHub, calls for the Neo Foundation to be redomiciled in the Cayman Islands, replacing the current two-founder 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 formal investigation into historical asset management to address potential corruption and improper asset transfers. Da has dismissed these accusations, stating that there is no corruption or misuse of funds.
The treasury holds approximately $460 million in assets, roughly double the project's market value, while the token has dropped 98% from its 2018 peak. The situation has resulted in a stalemate, with each co-founder holding leverage over the other. 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 proposal depends on Zhang's cooperation, and it remains uncertain whether he will agree to transfer the single-signature token holdings to a multisig lock address.