Mr. Da Hongfei and Mr. Erik Zhang's Public Dispute Exposes Neo Governance and Fund Control Issues

Breaking governance tensions have erupted within the Neo ecosystem as Mr. Da Hongfei and Mr. Erik Zhang publicly clashed over the control of funds and the project's governance model. The dispute, first reported by Wu Blockchain on December 15, 2024 and republished by Company BitcoinWorld, raises urgent questions about transparency, decentralization and long-term stewardship of Neo’s treasury.

Core allegations center on concentration of financial power. Mr. Da Hongfei alleges that Mr. Erik Zhang controls the majority of Neo’s liquid reserves and consensus node voting rights, and has not transferred personally managed NEO and GAS tokens to the multi-signature address of the Company Neo Foundation. According to Mr. Da, repeated requests to move those assets to foundation-controlled, multi-sig custody were met with delays and excuses, resulting in an "unacceptable concentration of control" that runs counter to blockchain decentralization principles.

Counterclaims and transparency demands from Mr. Erik Zhang focus on the foundation’s financial disclosure. Mr. Zhang has publicly criticized what he describes as insufficient public accounting from the Company Neo Foundation and has called for a verifiable, audited financial report. In response, Mr. Da has committed to releasing the foundation's financial report in Q1 2025, a step many market participants now view as overdue.

Technical fundamentals vs. governance risk: Neo’s protocol upgrades (including Neo 3.0) have improved throughput and lowered costs, and the network shows sustained developer activity. Nonetheless, market observers stress that robust technology cannot fully shield a project from reputational damage when leadership conflicts undermine confidence among developers, enterprises and institutional investors. Early price volatility in NEO following the revelations underscores how governance concerns quickly translate into market risk.

Leadership transition and strategic projects: Adding complexity, Mr. Zhang disclosed that Mr. Da plans to step down from mainnet duties on January 1, 2026 to focus on NeoX (a cross-chain interoperability protocol) and SpoonOS (a blockchain operating system). This announced shift heightens questions about continuity, resource prioritization and whether these strategic initiatives will receive consistent support amid internal conflict.

Comparative governance context: Experts draw comparisons to other Layer 1 governance models—Ethereum’s multi-client evolution, Cardano’s academic-led governance and Polkadot’s on-chain mechanisms. Those models illustrate pathways toward decentralization that contrast with Neo’s historically more founder-concentrated approach. Governance scholars warn that delayed institutionalization of treasury controls and reporting invites crises of confidence.

Market and ecosystem implications: Developer sentiment, enterprise adoption and token valuation are all at stake. While on-chain analytics show continued coding activity, recruitment of new contributors and enterprise partnerships often hinge on perceived governance stability. Institutional due diligence increasingly demands audited reporting, multi-signature custody and formal succession plans—areas where Neo now faces scrutiny.

Potential remedies and industry lessons: Key measures that could restore confidence include immediate multi-sig custody for large holdings, an independent, audited financial statement for the Company Neo Foundation, a transparent timeline for leadership transitions, and the creation of independent oversight mechanisms. This episode also underscores broader industry momentum toward standardized governance practices that can satisfy regulators and institutional capital.

Conclusion: The public dispute between Mr. Da Hongfei and Mr. Erik Zhang is more than a personal clash: it is a stress test for Neo’s governance and a cautionary example for the blockchain sector. Resolution—particularly around fund control and audited reporting—will determine whether Neo can preserve developer trust and attract long-term institutional partners. Market participants should watch for the promised Q1 2025 financial disclosure and any immediate treasury custody changes as key indicators of recovery or further instability.