For years, NEO’s treasury was held in a setup that might be uncommon for many monetary establishments: a whole bunch of thousands and thousands of {dollars} in crypto property have been managed by private wallets, with no multisig protections and little formal oversight.
That individual, in accordance with co-founder Da Hongfei, is Erik Zhang, NEO’s different co-founder and the architect of its core protocol.
“Round 85% is managed by Eric alone with single signature,” Da mentioned in an interview. “It had by no means been transferred to any particular person or any multi-sig.” The native NEO and GAS tokens Zhang holds are at the moment price between $200 million and $250 million, Da estimated. That is greater than NEO’s present $197 million market capitalization.
Zhang, for his half, has accused Da of separate issues. The 2 founders have been airing these 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 Basis 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 protecting the Basis in Singapore, not transfer it to the Cayman Islands.
Most pointedly, Zhang’s proposal requires a proper investigation into historic asset administration, together with provisions to handle potential corruption, improper asset transfers, and concealment of public property.
Da dismissed these provisions flatly. “I believe it is a very blunt and empty accusation,” he mentioned. “There isn’t a 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 undertaking’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 primary, the native NEO and GAS tokens, sits largely beneath 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.
These 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 nearly evenly between two people who find themselves not talking productively, every holding leverage over the opposite, neither keen to maneuver first.
Da framed his proposal as mutual disarmament.
“NGD will lose its management over many of the property, together with the BTC and stablecoins, that are over $200 million. And Eric will lose his private management of nearly all of the NEO tokens,” he mentioned.
“Mainly, me and Eric must sacrifice our particular person management over property. I believe that is the basic change.”
He mentioned he is keen, however would not know if Zhang is.
Da’s restructuring relies upon completely on Zhang’s cooperation for its most crucial 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.
Requested what occurs if Zhang refuses, Da was candid.
“If there’s one individual holding round half of a crypto native token and never keen at hand over to a multi-sig, constitutional governance, then what the neighborhood ought to do, I believe the reply ought to come from the neighborhood itself.
CoinDesk reached out to Erik Zhang for remark and had not heard again by time of publication