For years, NEO’s treasury was held in a setup that might be uncommon for many monetary establishments: lots of of thousands and thousands of {dollars} in crypto property have been managed via private wallets, with no multisig protections and little formal oversight.
That individual, in response 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 stated 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 present 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 struggle has since produced rival governance plans and an unsuccessful mediation effort in Hong Kong.
Da revealed 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 known as staying on the board retaining 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 think it’s a very blunt and empty accusation,” he stated. “There is no corruption, no misuse of funds.”
For some observers, nevertheless, the numbers appear fairly stark. NEO’s treasury holds ~$460 million in property, roughly double the mission’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 underneath 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 via early-stage funding returns.
The result’s a treasury cut up nearly evenly between two people who find themselves now 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 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 stated.
“Basically, me and Eric need to sacrifice our individual control over assets. I think that’s the fundamental change.”
He stated he is keen, however does not know if Zhang is.
Da’s restructuring relies upon solely on Zhang’s cooperation for its most crucial step of transferring the single-signature token holdings to a multisig lock deal with. 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 handy 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
