For years, the project's treasury was managed in an unconventional manner, with hundreds of millions of dollars in cryptocurrency assets controlled by personal wallets and lacking multi-signature protections or formal oversight. According to co-founder Da Hongfei, the individual responsible for controlling around 85% of the project's funds is Erik Zhang, the other co-founder and architect of the core protocol.
Da estimates that the native tokens held by Zhang are currently worth between $200 million and $250 million, exceeding the project's current market capitalization of $197 million. The dispute between the two founders has been ongoing since December, with both parties airing their grievances publicly. The conflict has led to the development of competing governance proposals, including Da's plan to relocate the project's foundation to the Cayman Islands, establish an independent five-member board, and redistribute tokens to holders. Zhang's counter-proposal involves maintaining the current governance structure and conducting a formal investigation into historical asset management.
Da has dismissed Zhang's allegations of corruption and mismanagement, stating that there is no evidence to support these claims. The project's treasury holds approximately $460 million in assets, which is roughly double the project's market value, with the token having dropped 98% from its peak in 2018.
The situation has resulted in a stalemate, with both founders holding significant control over the project's assets and neither willing to concede. Da has framed his proposal as a form of mutual disarmament, where both parties would relinquish control over the assets. However, the success of this plan relies on Zhang's cooperation, and it remains uncertain whether he will agree to transfer the single-signature token holdings to a multi-signature lock address.