For years, the NEO project's treasury has been managed through an unconventional setup, with hundreds of millions of dollars in crypto assets controlled by personal wallets and lacking formal oversight and multi-signature protections. 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 alone controls around 85% of the project's assets, valued between $200 million and $250 million, using single-signature wallets.
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 since December, resulting in rival governance plans and a failed mediation effort in Hong Kong. Da has proposed a restructuring plan, which involves relocating 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 token holders.
In contrast, Zhang's counter-proposal suggests maintaining the current governance structure, with him remaining on the board, and calls for 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 evidence of 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 2018 peak.
The treasury is split between two halves, with the native NEO and GAS tokens controlled by Zhang and the remaining assets, including bitcoin, ether, and stablecoins, managed by NGD, the entity run by Da. Da's proposal aims to achieve mutual disarmament, where both he and Zhang would relinquish control over the assets, with NGD losing control over most of its assets and Zhang losing personal control over the majority of the NEO tokens. The success of this proposal depends on Zhang's cooperation, and Da has committed to a one-to-three month timeline for its implementation.
If Zhang refuses to cooperate, Da believes the community should decide the next course of action.