“Around 85% is controlled by Eric alone with single signature,” Da Hongfei told CoinDesk. “It had never been transferred to any individual or any multi-sig.”
That sentence, delivered matter-of-factly in an interview, describes a setup that would get most traditional finance executives fired on the spot. One person, with one private key, holding somewhere between $200 million and $250 million in a project’s native tokens. No multisig. No formal oversight committee. No checks. For years.
The person is Erik Zhang, co-founder of NEO and the architect of its core protocol. His fellow co-founder Da Hongfei has decided that arrangement needs to end. Zhang, apparently, disagrees with how. The resulting feud has been playing out in public since December 2025, complete with dueling governance proposals, failed mediation in Hong Kong, and accusations flying in both directions.
What makes this particular founder fight worth watching isn’t the interpersonal drama (crypto has plenty of that). It’s the math. NEO’s treasury holds approximately $460 million in assets, which is roughly double the project’s current $197 million market capitalization. The token itself has dropped 98% from its 2018 peak. You have a treasury that’s worth more than the thing it’s supposed to support, split between two people who aren’t speaking productively, each holding leverage over the other.
A Treasury Split Down the Middle, Controlled by Two Strangers
NEO published its FY2025 financial report earlier this year. It was the first comprehensive disclosure since 2020, which tells you something about how the project has been run. The numbers that emerged paint a picture of a remarkably well-funded operation that somehow never translated that funding into sustained market value.
The treasury breaks down into two distinct piles, and understanding that split is essential to understanding why neither founder can simply walk away.
The first pile consists of native NEO and GAS tokens. These sit largely under Zhang’s single-signature control. Da estimated their current value at $200 million to $250 million. That’s more than NEO’s entire market cap.
The second pile is everything else: Bitcoin, Ethereum, stablecoins, fund-of-fund investments, and bank balances. This portion is managed by NGD, the entity Da runs. The FY2025 report revealed over 1,100 BTC, more than $100 million in stablecoins and cash, and a portfolio of venture investments that includes an unliquidated stake in Binance. These non-token assets have grown to over $200 million, driven largely by appreciation in BTC and ETH holdings accumulated through early-stage investment returns.
So you have roughly $230 million controlled by Zhang, roughly $230 million controlled by Da, and a token that’s worth less than either half. The symmetry is almost elegant if you ignore how dysfunctional it is.
Da framed his restructuring proposal, published on GitHub on April 9, as “mutual disarmament.” The logic is straightforward: “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. Basically, me and Eric need to sacrifice our individual control over assets. I think that’s the fundamental change.”
The problem is that mutual disarmament only works when both parties agree to disarm.
Competing Visions for What Comes Next
Da’s proposal contains several structural changes. The Neo Foundation would redomicile from Singapore to the Cayman Islands. The current two-founder governance would be replaced by an independent five-member board. Both founders would be barred from that board for 24 months. And roughly 26 million NEO and 40 million GAS would be redistributed to tokenholders.
The most critical step, however, is transferring Zhang’s single-signature token holdings to a multisig lock address. Without Zhang’s cooperation, that step cannot happen. Da acknowledged as much in an April 10 AMA, committing to a one-to-three month timeline while noting the obvious: the entire plan depends on Zhang agreeing to give up control.
Asked what happens if Zhang refuses, Da was candid: “If there’s one person holding around half of a crypto native token and not willing to hand over to a multi-sig, constitutional governance, then what the community should do, I think the answer should come from the community itself.”
That’s a polite way of saying he doesn’t have a backup plan.
Zhang’s counter-proposal takes a different approach. He wants to stay on the board. He wants to keep the Foundation in Singapore rather than moving it to the Cayman Islands. And, most pointedly, he wants a formal investigation into historical asset management, with provisions to address what he describes as potential corruption, improper asset transfers, and concealment of public assets.
Da dismissed those provisions: “I think it’s a very blunt and empty accusation. There is no corruption, no misuse of funds.”
CoinDesk reached out to Zhang for comment. He had not responded by publication time.
The Numbers That Don’t Add Up
The broader crypto community has seen plenty of founder disputes. What makes this one unusual is the sheer scale of the treasury relative to the project’s market value. A treasury worth $460 million supporting a token worth $197 million creates some uncomfortable questions.
Consider the math from an outside investor’s perspective. If you bought $100 worth of NEO tokens, you’d theoretically have a claim on roughly $233 worth of treasury assets (the ratio of treasury to market cap). That’s a simplification, since tokenholders don’t have direct claims on foundation assets, but it illustrates the disconnect. The treasury has grown, or at least preserved value through BTC and ETH appreciation, while the token itself has collapsed.
The 98% decline from NEO’s 2018 peak isn’t unusual in crypto. Plenty of altcoins from that era have fared worse. But most of those projects also burned through their treasuries or never had much runway to begin with. NEO managed to hold onto its assets while failing to generate the kind of ecosystem growth that would justify them.
The FY2025 report being the first comprehensive disclosure since 2020 raises its own questions. Five years without detailed financials is a long time, especially for a project sitting on that much capital. The gap suggests either a lack of transparency infrastructure, a lack of urgency about transparency, or both.
Da’s proposal attempts to address some of this through the redistribution of 26 million NEO and 40 million GAS to tokenholders. That’s a meaningful amount, though the details of how such a distribution would work remain unclear. Airdropping tokens to existing holders is mechanically simple but prompts skepticism about timing, vesting, and whether it actually changes the underlying dynamics.
Why Mediation Failed and What Comes Next
The two founders attempted mediation in Hong Kong. It didn’t work. Neither side has provided detailed accounts of what was discussed or why talks broke down, but the public proposals that followed suggest the gap between their positions is substantial.
Da wants both founders out of governance for two years. Zhang wants to stay on the board and investigate Da. Those aren’t positions that compromise easily.
The Cayman Islands vs. Singapore jurisdictional question adds another layer. Singapore has established itself as a relatively crypto-friendly regulatory environment with clear frameworks. The Cayman Islands offers different advantages, primarily around tax treatment and legal flexibility for token distributions. Da hasn’t elaborated on why he prefers the Cayman relocation, but the choice would have practical implications for how any restructured foundation operates.
For tokenholders, the situation creates a peculiar form of limbo. The treasury exists. The assets are real. But accessing any value from that treasury depends on two people who can’t agree on basic governance questions reaching some kind of settlement. In the meantime, the token trades at a massive discount to the underlying assets it theoretically represents.
This scenario echoes dynamics seen in other crypto governance disputes, though the scale here is notable. Similar conflicts over treasury control and founder authority have emerged across DeFi and layer-1 projects. The ongoing WLFI dispute with Justin Sun over $75 million in DeFi positions shows how quickly these treasury conflicts can escalate when the parties involved stop cooperating.
The fundamental problem isn’t unique to crypto: concentrated control over shared resources creates risk. What’s unique is how visible that concentration can be when the assets sit on-chain (or in this case, in a single-signature wallet that anyone can observe). Traditional corporate governance problems play out in boardrooms and courtrooms. This one plays out on GitHub and Twitter, with the specific wallet addresses theoretically identifiable by anyone with a block explorer.
Da’s April 10 AMA timeline of one to three months suggests he believes resolution is possible relatively quickly. That optimism may or may not be warranted. Zhang’s counter-proposal, with its emphasis on investigation and accountability, suggests he’s not in a hurry to sign over control of assets he’s held for years.
The community, for its part, doesn’t have obvious recourse. NEO isn’t a DAO with on-chain voting. The foundation structure means tokenholders are essentially passive observers to a dispute between two people who happen to control something worth half a billion dollars. Da’s suggestion that “the answer should come from the community itself” is aspirational at best. What can a community do when one person holds the keys and isn’t inclined to give them up?
Sell, probably. Which, given the 98% decline from peak, many already have.
The next few months will determine whether Da’s mutual disarmament framework gains traction or whether Zhang’s demand for investigation creates a prolonged standoff. Neither outcome is guaranteed. What’s certain is that $200 million sitting in a single-signature wallet, controlled by someone who may or may not cooperate with restructuring efforts, represents a concentration of risk that most projects abandoned years ago.
Da opened by describing the current setup as something that “had never been transferred.” The question now is whether it ever will be.
