For years, the NEO project's treasury was managed in an unconventional manner, with hundreds of millions of dollars in crypto assets controlled through personal wallets and lacking multisig protections and formal 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 the core protocol. Da estimates that the native NEO and GAS tokens held by Zhang are currently worth between $200 million and $250 million, surpassing the project's $197 million market capitalization. The dispute between the two founders has led to rival governance plans, with Da proposing the establishment of an independent five-member board, the redistribution of tokens to holders, and the relocation of the Neo Foundation from Singapore to the Cayman Islands.
In contrast, Zhang's counter-proposal involves staying on the board, keeping the foundation in Singapore, and conducting a formal investigation into historical asset management to address potential corruption and improper asset transfers. Da has dismissed these accusations, stating that there is no corruption or misuse of funds.
The treasury holds approximately $460 million in assets, roughly double the project's market value, while the token has dropped 98% from its 2018 peak. The situation has resulted in a stalemate, with each co-founder holding leverage over the other and neither willing to make the first move. Da has framed his proposal as a form of mutual disarmament, where both he and Zhang would relinquish their individual control over assets.
However, the success of this proposal depends on Zhang's cooperation, and it remains uncertain whether he will agree to transfer the single-signature token holdings to a multisig lock address.