The cryptocurrency project NEO has been operating with an unusual financial setup, where hundreds of millions of dollars in crypto assets are controlled by personal wallets with no multi-sig protections and limited oversight. According to co-founder Da Hongfei, the individual responsible for controlling around 85% of the project's assets with a single signature is Erik Zhang, the other co-founder and architect of NEO's core protocol. The assets in question, consisting of native NEO and GAS tokens, are currently valued at between $200 million and $250 million. Da has proposed a restructuring plan, which involves redomiciling the Neo Foundation to the Cayman Islands, establishing an independent five-member board, and redistributing tokens to holders.
In contrast, Zhang's counter-proposal includes staying on the board, keeping the foundation in Singapore, and conducting a formal investigation into historical asset management. The dispute between the co-founders has been ongoing since December and has resulted in rival governance plans and an unsuccessful mediation effort.
The situation has sparked concerns among observers, given the significant disparity between NEO's treasury holdings and its market value, as well as the token's substantial decline in value since its peak in 2018. Da's proposal is framed as a form of mutual disarmament, where both he and Zhang would relinquish control over the project's 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-sig lock address.