For years, the NEO treasury was managed through an unconventional setup, with hundreds of millions of dollars in crypto assets controlled by personal wallets, lacking multi-signature protections and formal oversight. According to co-founder Da Hongfei, the individual controlling around 85% of the funds is Erik Zhang, the project's other co-founder and core protocol architect. Da estimates that the native NEO and GAS tokens held by Zhang are currently valued between $200 million and $250 million, exceeding the project's current market capitalization of $197 million.
The two co-founders have been publicly disputing since December, resulting in rival governance plans and an unsuccessful 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 barring both founders from the board for 24 months. Zhang's counter-proposal involves staying on the board and keeping the Foundation in Singapore, with a focus on investigating historical asset management and addressing potential corruption.
Da has dismissed these accusations, stating that there is no corruption or misuse of funds. 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 tokens largely under Zhang's control and the non-token assets managed by NGD, the entity run by Da.
Da has framed his proposal as a form of mutual disarmament, where both parties would relinquish control over the assets. However, the success of this plan depends on Zhang's cooperation, and it remains uncertain whether he will agree to transfer the single-signature token holdings to a multi-signature lock address.