For years, NEO’s treasury was kept in a configuration that would be unusual for most financial institutions: hundreds of millions of dollars in crypto assets were controlled through personal wallets, with no multi-signature protections and little formal oversight.
That person, according to co-founder Da Hongfei, is Erik Zhang, the other co-founder of NEO and the architect of its core protocol.
“About 85% is controlled solely by Eric with a single firm,” Da said in an interview. “It had never been transferred to any individual or to any multiple signature.” The native tokens NEO and GAS that Zhang holds are currently worth between $200 million and $250 million, Da estimated. That’s more than NEO’s current market capitalization of $197 million.
Zhang, for his part, has accused Da of having separate problems. The two founders have been airing those disputes in public since December.
Since then, the fighting has produced rival governance plans and a failed attempt at mediation in Hong Kong.
Da posted his restructuring proposal on GitHub on April 9. It calls for relocating the Neo Foundation from Singapore to the Cayman Islands, replacing the current two-founder governance with an independent five-member board, excluding both founders from that board for 24 months, and redistributing approximately 26 million NEO and 40 million GAS to token holders.
Zhang’s counterproposal called for staying on the board and keeping the Foundation in Singapore, not moving it to the Cayman Islands.
Most significantly, Zhang’s proposal calls for a formal investigation into historical asset management, including provisions to address potential corruption, improper asset transfers and the concealment of public assets.
Dad rejected those provisions outright. “I think it’s a very blunt and empty accusation,” he said. “There is no corruption or embezzlement of funds.”
To some observers, however, the numbers seem quite stark. NEO’s treasury has ~$460 million in assets, roughly double the project’s $197 million market value, while the token has fallen 98% from its 2018 peak.
mutual disarmament
NEO’s financial report for fiscal 2025, its first comprehensive disclosure since 2020, revealed more than 1,100 BTC, more than $100 million in stablecoins and cash, and a portfolio of venture investments that includes an unliquidated stake in Binance.
Dad divided the treasure into two halves. The first, the native tokens NEO and GAS, are largely under Zhang’s single-signature control. The second, bitcoin, ether, stablecoins, fund-of-funds investments and bank balances, is managed by NGD, the entity that runs Da.
Those once relatively modest non-token assets have grown to more than $200 million, driven largely by the appreciation of their BTC and ETH holdings accumulated through early-stage investment returns.
The result is a treasury divided almost equally between two people who no longer talk productively, each of whom has influence over the other and neither of whom is willing to act first.
Da formulated his proposal as mutual disarmament.
“NGD will lose its control over most assets, including BTC and stablecoins, exceeding $200 million. And Eric will lose his personal control over most NEO tokens,” he said.
“Basically, Eric and I need to sacrifice our individual control over the assets. I think that’s the fundamental change.”
He said he is willing, but he doesn’t know if Zhang is willing.
Da’s restructuring depends entirely on Zhang’s cooperation in its most critical step of transferring single-signature token holdings to a multi-signature blocking address. In an April 10 AMA, Da committed to a one- to three-month timeline.
When asked what happens if Zhang refuses, Da was candid.
“If there is one person who owns about half of a native crypto token and is not willing to hand it over to a multi-signature constitutional government, then what the community should do, I think the answer should come from the community itself.
CoinDesk reached out to Erik Zhang for comment and had not received a response at the time of publication.
