NEO co-founder Erik Zhang maintains control over approximately $200 million to $250 million in crypto assets through personal wallets without multi-signature security or formal oversight, according to his co-founder Da Hongfei. The supporting evidence appears in the cited X post.
The dispute over treasury management has escalated into competing governance proposals that could reshape one of crypto’s earliest smart contract platforms.
The assets under Zhang’s control include native NEO and GAS tokens worth more than the project’s current $197 million market capitalization. Da Hongfei revealed that “around 85% is controlled by Eric alone with single signature” and “had never been transferred to any individual or any multi-sig” arrangement.
Competing Restructuring Proposals Emerge
The public dispute between the two founders has intensified since December, producing rival governance plans after an unsuccessful mediation effort in Hong Kong. Da Hongfei published his restructuring proposal on GitHub calling for significant organizational changes to address the treasury management concerns.
Da’s plan proposes redomiciling the Neo Foundation from Singapore to the Cayman Islands and replacing the current two-founder governance structure with an independent five-member board.
The proposal would bar both founders from serving on the new board for 24 months and redistribute roughly 26 million NEO and 40 million GAS tokens to existing tokenholders.
Zhang responded with a counter-proposal that takes a markedly different approach to governance restructuring. His plan calls for maintaining the Foundation’s Singapore domicile and keeping both founders involved in board positions, directly contradicting Da’s independence framework.
Most significantly, Zhang’s proposal demands a formal investigation into historical asset management practices. The counter-proposal includes provisions to address potential corruption, improper asset transfers, and concealment of public assets within the organization’s financial history.
Treasury Assets Dwarf Market Valuation
The governance dispute occurs against a backdrop of unusual financial metrics for the NEO ecosystem. The project’s treasury currently holds approximately $460 million in total assets, representing roughly double NEO’s market valuation despite the platform’s significant decline from previous highs.
NEO’s token has experienced a dramatic 98% decline from its 2018 peak, reflecting broader challenges facing earlier generation blockchain platforms. The disconnect between treasury holdings and market performance has become a focal point in discussions about proper asset stewardship and governance accountability.
Da Hongfei dismissed Zhang’s corruption allegations as “very blunt and empty accusation,” stating definitively that “there is no corruption, no misuse of funds.” However, the substantial treasury holdings relative to market performance continue to raise questions about asset deployment and strategic direction.
The public airing of disputes through social media platforms has provided unusual transparency into internal governance conflicts within a major blockchain project. Both founders have used Twitter and GitHub to present their cases directly to the NEO community and broader crypto ecosystem.
The concentration of such significant crypto assets under single-signature control represents a governance model that would be considered highly unusual for traditional financial institutions.
Multi-signature wallet arrangements have become standard practice across the cryptocurrency industry for managing substantial treasury holdings, making NEO’s current structure an outlier among major projects.
Industry observers note that the NEO governance crisis highlights broader questions about founder control and decentralization in blockchain projects that launched during the 2017-2018 crypto boom.
Many projects from that era continue to grapple with transitioning from founder-led structures to more distributed governance models.
The outcome of this dispute could establish important precedents for how early-stage blockchain projects address similar governance transitions.
With hundreds of millions in assets at stake, the resolution mechanisms chosen by NEO may influence governance evolution across other cryptocurrency projects facing founder succession questions.
Both proposals remain under community consideration as the mediation process continues.
The substantial financial stakes and fundamental disagreements between co-founders suggest the governance restructuring process may require additional time to reach resolution, particularly given the complex legal and technical aspects of international foundation restructuring.
Not Financial Advice: This article is for informational purposes only. Crypto investments are highly volatile. Always do your own research.
