For years, NEO’s treasury was held in a setup that would be unusual for most financial institutions: hundreds of millions of dollars in cryptoassets were controlled through personal wallets, with no multisig protection and little formal oversight.
That person, according to co-founder Da Hongfei Erik Zhang, is NEO’s other co-founder and the architect of its core protocol.
“About 85% is controlled by Eric alone with a single signature,” Da said in an interview. “It had never been transferred to any person or any multi-sig.” The native NEO and GAS tokens Zhang holds are currently worth between $200 million and $250 million, Da estimated. That’s more than NEO’s current market cap of $197 million.
Zhang, for his part, has accused Da of separate problems. The two founders have aired these disputes publicly since December.
The fight has since produced rival government plans and a failed mediation effort in Hong Kong.
Da published its restructuring proposal on GitHub on April 9. It calls for moving the Neo Foundation from Singapore to the Cayman Islands, replacing the current two-founder governance with an independent five-member board, suspending both founders from that board for 24 months, and redistributing roughly 26 million NEO and 40 million GAS holders to token holders.
Zhang’s counter proposal was to stay on the board and keep the fund in Singapore, not move it to the Cayman Islands.
Most pointedly, Zhang’s proposal calls for a formal investigation into historical asset management, including provisions to address potential corruption, improper asset transfers and concealment of public assets.
Then flatly rejected these provisions. “I think it’s a very blunt and empty accusation,” he said. “There is no corruption, no misuse of funds.”
To some observers, however, the numbers seem quite stark. NEO’s treasury holds ~$460 million in assets, roughly double the project’s $197 million market cap, while the token is down 98% from its 2018 peak.
Mutual disarmament
NEO’s FY2025 financial report, its first comprehensive disclosure since 2020, 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.
Then the treasury broke in two. The first, the native NEO and GAS tokens, sit largely under Zhang’s single-signature control. The other, bitcoin, ether, stablecoins, fund-of-fund investments and bank balances, is managed by NGD, the entity Da operates.
These non-token assets, once relatively modest, have grown to over $200 million, largely fueled by the appreciation of its BTC and ETH holdings accumulated through early investment returns.
The result is a treasury that is divided almost equally between two people who no longer speak productively, each with leverage over the other, neither willing to move first.
Then formulated his proposal as mutual disarmament.
“NGD will lose its control over most of the assets, including BTC and stablecoins, which are over $200 million. And Eric will lose his personal control over the majority of NEO tokens,” he said.
“Basically, Eric and I have to sacrifice our individual control over assets. I think that’s the fundamental change.”
He said he was willing, but don’t know if Zhang is.
Da’s restructuring depends entirely on Zhang’s cooperation for its most critical step of transferring the single-signature token holding to a multisig lock address. In an AMA on April 10, Da committed to a timeline of one to three months.
When asked what happens if Zhang refuses, Da was candid.
“If there is one person who has about half of a cryptonative token and is not willing to hand over to a multi-sig, constitutional governance what the community should do, then I think the answer has to come from the community itself.
CoinDesk reached out to Erik Zhang for comment and had not heard back by the time of publication
