The treasury of a prominent cryptocurrency project has been managed in an unconventional manner, with hundreds of millions of dollars in assets controlled through personal wallets lacking multi-signature protections and formal oversight. 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 assets, valued between $200 million and $250 million, using a single signature, without any transfer to a multi-signature wallet or individual.
The native tokens held by Zhang are worth more than 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 proposals and an unsuccessful mediation attempt in Hong Kong.
Da has proposed a restructuring plan, which involves relocating the project's foundation from Singapore to the Cayman Islands, establishing an independent five-member board, and prohibiting both founders from the board for 24 months. Additionally, Da's plan includes redistributing approximately 26 million tokens to holders. In response, Zhang has proposed an alternative plan, which includes staying on the board, keeping the foundation in Singapore, and conducting a formal investigation into historical asset management to address potential corruption and asset mismanagement. Da has dismissed these accusations, stating that there is no corruption or misuse of funds.
The project's treasury holds around $460 million in assets, roughly double its market value, with the token having dropped 98% from its 2018 peak. The situation has resulted in a stalemate, with both co-founders holding significant leverage over the project's assets and neither willing to compromise. Da has framed his proposal as a form of mutual disarmament, where both he and Zhang would relinquish control over the assets, with NGD losing control over most assets, including bitcoin and stablecoins, and Zhang losing personal control over the majority of the tokens. However, the success of this proposal depends on Zhang's cooperation, and if he refuses, the community may need to intervene to determine the project's future governance.