The treasury of a prominent cryptocurrency project has been managed in an unconventional manner, with hundreds of millions of dollars in assets controlled by personal wallets lacking multi-signature protections and formal oversight. According to co-founder Da Hongfei, the individual responsible for this setup is Erik Zhang, the project's other co-founder and core protocol architect. Da estimates that Zhang alone controls around 85% of the project's assets, valued between $200 million and $250 million, using a single signature. This amount exceeds the project's current market capitalization of $197 million.
The native tokens held by Zhang have not been transferred to any individual or multi-signature wallet. Zhang has retaliated by accusing Da of separate issues, and the two founders have been publicly disputing since December. The conflict has led to rival governance proposals and an unsuccessful mediation effort in Hong Kong. Da has proposed a restructuring plan, which involves redomiciling the project's foundation from Singapore to the Cayman Islands, establishing an independent five-member board, and barring both founders from the board for 24 months.
Additionally, Da's plan includes redistributing approximately 26 million tokens to holders. In response, Zhang has put forth a counter-proposal that involves staying on the board and keeping the foundation in Singapore.
Zhang's proposal also calls for a formal investigation into historical asset management, including provisions to address 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 around $460 million in assets, roughly double its market value, while the token has dropped 98% from its peak in 2018. The treasury is split into two halves, with the native tokens largely under Zhang's single-signature control and the non-token assets, including bitcoin, ether, and stablecoins, managed by Da's entity.
Da has framed his proposal as a form of mutual disarmament, where both he and Zhang would relinquish their individual control over the assets. However, the success of this plan depends 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.