A $200 Million Crypto Project's Fate Hangs in the Balance as Co-Founders Clash

For years, the NEO treasury has been managed through a non-traditional setup, with hundreds of millions of dollars in crypto assets controlled by personal wallets and lacking multi-signature protections or formal oversight. According to co-founder Da Hongfei, his fellow co-founder Erik Zhang has sole control over around 85% of the project's assets, valued between $200 million and $250 million, with no multi-signature protection in place. The native NEO and GAS tokens held by Zhang are currently worth more than the project's $197 million market capitalization.

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 that involves 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 tokens to token holders. In contrast, Zhang's counter-proposal involves 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, asset transfers, and concealment of public assets.

Da has dismissed these allegations, 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 treasury is split between two halves, with the native NEO and GAS tokens under Zhang's control and the non-token assets, including bitcoin, ether, and stablecoins, 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 sacrifice their individual control over 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 multi-signature lock address.