For years, the NEO project's treasury was managed through an unconventional setup, with hundreds of millions of dollars in crypto assets controlled by personal wallets and lacking multisignature protections and formal oversight. According to co-founder Da Hongfei, the individual in control of these assets is Erik Zhang, the project's other co-founder and core protocol architect. Da estimates that Zhang holds around 85% of the project's assets, valued between $200 million and $250 million, with single-signature control and no multisig protection. The native NEO and GAS tokens held by Zhang are currently worth more than the project's $197 million market capitalization.
The two co-founders have been publicly disputing their differences since December, resulting in rival governance plans and an unsuccessful mediation effort in Hong Kong. Da has proposed a restructuring plan that involves redomiciling the Neo Foundation from Singapore to the Cayman Islands, establishing an independent five-member board, and redistributing approximately 26 million NEO and 40 million GAS tokens to tokenholders. In contrast, Zhang's counter-proposal suggests maintaining the current governance structure and staying on the board, while also calling for a formal investigation into historical asset management to address potential corruption and improper asset transfers.
Da has dismissed these allegations, stating that there is no corruption or misuse of funds. Observers have noted that the project's treasury holds around $460 million in assets, roughly double its market value, while the token has dropped 98% from its 2018 peak. The treasury is split between two halves, with the native NEO and GAS tokens under Zhang's single-signature control and the non-token assets, including bitcoin, ether, and stablecoins, managed by NGD, the entity run by Da. 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 Da has stated that if Zhang refuses to transfer the single-signature token holdings to a multisig lock address, the community should decide the next course of action.