Co-Founder Holds $200 Million in Project Crypto, Sparking Governance Debate

For years, the NEO project's treasury has been managed in an unconventional manner, with hundreds of millions of dollars in crypto assets controlled through personal wallets and lacking multisig protections or 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, with no multisig protections in place. 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 disagreeing since December, with Da accusing Zhang of having too much control over the project's assets and Zhang accusing Da of separate issues. The dispute 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 proposal involves staying on the board, keeping the foundation in Singapore, and conducting a formal investigation into historical asset management. Da has dismissed Zhang's accusations of corruption and misuse of funds, stating that there is no evidence to support these claims.

The project's treasury holds approximately $460 million in assets, roughly double its market value, with the token having dropped 98% from its 2018 peak. The treasury is split between two halves, with the native NEO and GAS tokens under Zhang's 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 the 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.