The NEO project's treasury, valued at hundreds of millions of dollars in cryptocurrency, has been managed through personal wallets without multi-signature security or formal oversight. According to co-founder Da Hongfei, Erik Zhang, the project's other co-founder, controls around 85% of the funds with a single signature.
The tokens held by Zhang are estimated to be worth between $200 million and $250 million, surpassing NEO's current market capitalization of $197 million. The two founders have been publicly disputing since December, resulting in rival governance proposals and an unsuccessful mediation attempt in Hong Kong. Da's proposal, published on GitHub, suggests relocating the Neo Foundation from Singapore to the Cayman Islands, establishing an independent five-member board, and preventing both founders from joining the board for 24 months. Additionally, it proposes redistributing approximately 26 million NEO and 40 million GAS tokens to token holders.
In contrast, Zhang's counter-proposal involves staying on the board and maintaining the Foundation's presence in Singapore. Zhang's plan also calls for a formal investigation into historical asset management, addressing potential corruption, improper asset transfers, and concealment of public assets.
Da dismisses these accusations, stating there is no corruption or misuse of funds. Observers note that NEO's treasury holds around $460 million in assets, roughly double the project's market value, while the token has declined 98% from its peak in 2018. The treasury is divided into two parts: the native NEO and GAS tokens, primarily controlled by Zhang, and the non-token assets, including bitcoin, ether, stablecoins, and fund-of-fund investments, managed by NGD, the entity run by Da. The non-token assets have grown to over $200 million, largely due to the appreciation of BTC and ETH holdings.
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 proposal depends on Zhang's cooperation, and Da is uncertain if Zhang is willing to cooperate.