For years, NEO’s treasury was held in a setup that could be uncommon for many monetary establishments: lots of of hundreds of thousands of {dollars} in crypto property have been managed by private wallets, with no multisig protections and little formal oversight.
That person, in accordance to co-founder Da Hongfei, is Erik Zhang, NEO’s different co-founder and the architect of its core protocol.
“Around 85% is controlled by Eric alone with single signature,” Da mentioned in an interview. “It had never been transferred to any individual or any multi-sig.” The native NEO and GAS tokens Zhang holds are at the moment value between $200 million and $250 million, Da estimated. That’s greater than NEO’s present $197 million market capitalization.
Zhang, for his half, has accused Da of separate issues. The two founders have been airing those disputes in public since December.
The combat has since produced rival governance plans and an unsuccessful mediation effort in Hong Kong.
Da printed his restructuring proposal on GitHub on April 9. It requires redomiciling the Neo Foundation from Singapore to the Cayman Islands, changing the present two-founder governance with an impartial five-member board, barring each founders from that board for twenty-four months, and redistributing roughly 26 million NEO and 40 million GAS to tokenholders.
Zhang’s counter-proposal referred to as staying on the board holding the Foundation in Singapore, not transfer it to the Cayman Islands.
Most pointedly, Zhang’s proposal requires a formal investigation into historic asset administration, together with provisions to tackle potential corruption, improper asset transfers, and concealment of public property.
Da dismissed these provisions flatly. “I think it’s a very blunt and empty accusation,” he mentioned. “There is no corruption, no misuse of funds.”
For some observers, nonetheless, the numbers appear fairly stark. NEO’s treasury holds ~$460 million in property, roughly double the challenge’s $197 million market worth, whereas the token has dropped 98% from its 2018 peak.
Mutual disarmament
NEO’s FY2025 monetary report, its first complete disclosure since 2020, revealed over 1,100 BTC, greater than $100 million in stablecoins and money, and a portfolio of enterprise investments together with an unliquidated stake in Binance.
Da broke the treasury into two halves. The first, the native NEO and GAS tokens, sits largely below Zhang’s single-signature management. The second, bitcoin, ether, stablecoins, fund-of-fund investments, and financial institution balances, is managed by NGD, the entity Da runs.
Those non-token property, as soon as comparatively modest, have grown to over $200 million, pushed largely by the appreciation of its BTC and ETH holdings accrued by early-stage funding returns.
The result’s a treasury break up virtually evenly between two people who find themselves not talking productively, every holding leverage over the different, neither keen to transfer first.
Da framed his proposal as mutual disarmament.
“NGD will lose its control over most of the assets, including the BTC and stablecoins, which are over $200 million. And Eric will lose his personal control of the majority of the NEO tokens,” he mentioned.
“Basically, me and Eric need to sacrifice our individual control over assets. I think that’s the fundamental change.”
He mentioned he is keen, however would not know if Zhang is.
Da’s restructuring relies upon totally on Zhang’s cooperation for its most important step of transferring the single-signature token holdings to a multisig lock tackle. In an April 10 AMA, Da dedicated to a one-to-three month timeline.
Asked what occurs if Zhang refuses, Da was candid.
“If there’s one person holding round half of a crypto native token and never keen to hand over to a multi-sig, constitutional governance, then what the group ought to do, I feel the reply ought to come from the group itself.
CoinDesk reached out to Erik Zhang for remark and had not heard again by time of publication
