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 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, worth between $200 million and $250 million, using a single signature. This amount exceeds the project's current market capitalization of $197 million. The native NEO and GAS tokens held by Zhang have sparked a heated debate between the two co-founders, who have been publicly airing their disputes since December.
The conflict has led to 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.
Additionally, Da's plan includes redistributing approximately 26 million NEO and 40 million GAS tokens to tokenholders. In response, Zhang has put forth a counter-proposal that calls for the Foundation to remain in Singapore and for him to retain his position on the board. Zhang's plan also includes a formal investigation into historical asset management, addressing potential corruption, improper asset transfers, and concealment of public assets.
Da has dismissed these allegations, stating that there is no corruption or misuse of funds. However, some observers find the numbers striking, with NEO's treasury holding around $460 million in assets, roughly double the project's market value, while the token has dropped 98% from its 2018 peak.
The project's FY2025 financial report revealed over 1,100 BTC, more than $100 million in stablecoins and cash, and a portfolio of venture investments, including an unliquidated stake in Binance. Da has divided the treasury into two halves, with the native NEO and GAS tokens under Zhang's single-signature control and the non-token assets, such as bitcoin, ether, stablecoins, and fund-of-fund investments, managed by NGD, the entity run by Da.
The result is a treasury split almost evenly between two individuals who are no longer communicating effectively, each holding leverage over the other and unwilling to make the first move. 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, it remains to be seen whether Zhang will cooperate, as Da's restructuring plan depends entirely on Zhang's willingness to transfer the single-signature token holdings to a multisig lock address.