For years, the NEO project's treasury was managed through an unconventional setup, with hundreds of millions of dollars in crypto assets controlled by personal wallets and lacking multisig protection. According to co-founder Da Hongfei, his fellow co-founder Erik Zhang holds around 85% of the project's crypto assets, valued between $200 million and $250 million, with single signature control.
Da estimates that the native NEO and GAS tokens Zhang holds are currently worth more than NEO's $197 million market capitalization. The two co-founders have been embroiled in a public dispute since December, with each presenting rival governance plans. Da's proposal, published on GitHub, calls for the Neo Foundation to be redomiciled in the Cayman Islands, the establishment of an independent five-member board, and the redistribution of approximately 26 million NEO and 40 million GAS to tokenholders.
In contrast, Zhang's counter-proposal advocates for maintaining the current governance structure, with the Foundation remaining in Singapore, and calls for a formal investigation into historical asset management. Da has dismissed these provisions as baseless accusations, stating that there has been no corruption or misuse of funds.
The NEO treasury holds around $460 million in assets, roughly double the project's market value, while the token has plummeted 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 over $100 million in stablecoins and cash, 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 relinquish 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.