One Person Holds the Keys to $200 Million of a Project’s Crypto. His Co-Founder Says that Has to End

Why It Matters

Centralized control of a majority of NEO’s assets undermines the project’s decentralized ethos and exposes investors to operational risk, making the governance dispute a litmus test for crypto‑project accountability.

Key Takeaways

• Erik Zhang controls $200‑250 M of NEO tokens via single‑signature wallet
• Da Hongfei proposes independent board and multisig to secure treasury
• Treasury holds ≈$460 M, double NEO’s $197 M market cap
• Conflict splits control between Zhang’s tokens and Da’s BTC/ETH assets
• Community may need to intervene if multisig transfer stalls

Pulse Analysis

NEO’s governance crisis highlights a rare but growing problem in the blockchain space: massive on‑chain assets locked in personal wallets without multisignature safeguards. The project’s treasury, valued at roughly $460 million, is split between two founders whose relationship has deteriorated. Zhang’s unilateral control of $200‑250 million in native tokens creates a single point of failure, while Da’s NGD entity manages the remaining crypto, including Bitcoin and stablecoins. This arrangement contradicts the decentralization narrative that originally attracted investors and raises red flags for regulators monitoring custodial risk.

The dispute centers on two competing restructuring blueprints. Da’s plan seeks to relocate the Neo Foundation to the Cayman Islands, install a five‑member independent board, and enforce multisig protection for all token holdings, effectively disarming both founders. Zhang’s counter‑proposal keeps the foundation in Singapore, retains his board seat, and demands a forensic audit of past asset movements. The core of the conflict is the transfer of Zhang’s single‑signature holdings; without his cooperation, the multisig lock cannot be implemented, leaving the community to decide whether to force a change or accept continued centralization. This stalemate underscores the importance of clear governance frameworks and transparent asset custody for blockchain projects.

For the broader crypto industry, the NEO saga serves as a cautionary tale. Projects that amass sizable treasuries must adopt institutional‑grade controls—multisig wallets, third‑party audits, and independent oversight—to protect stakeholder value and maintain credibility. Investors are increasingly scrutinizing governance structures, and any perception of unchecked authority can depress token prices, as seen with NEO’s 98 % decline from its 2018 peak. The outcome of this dispute will likely influence how emerging protocols design their treasury management and may spur regulatory bodies to formalize custodial standards for decentralized entities.