The cryptocurrency project NEO has been embroiled in a long-standing dispute over its governance structure, with co-founder Da Hongfei claiming that fellow co-founder Erik Zhang holds the keys to approximately $200 million in crypto assets. This unusual setup has raised concerns, as the funds are controlled through personal wallets with no multi-sig protections and little formal oversight. Da estimates that around 85% of the assets are controlled by Zhang alone, with single signature authority.
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 airing their disputes since December, resulting in rival governance plans and an unsuccessful mediation effort in Hong Kong.
Da has proposed a restructuring plan, which includes redomiciling 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 to tokenholders. In contrast, Zhang's counter-proposal suggests staying on the board and keeping the Foundation in Singapore. Zhang's plan also calls for a formal investigation into historical asset management, including provisions to address potential corruption and improper asset transfers.
Da has dismissed these accusations, stating that there is no corruption or misuse of funds. The dispute has led to a stalemate, with both co-founders holding significant leverage over the project's assets.
Da has framed his proposal as a form of mutual disarmament, where both he and Zhang would sacrifice their individual control over assets. However, the success of this plan depends on Zhang's cooperation, which remains uncertain.