NEO's Luna Moment: The Founders' War That Could Break the Project

Call to Action: The future of NEO is in the hands of its community. If you care about transparency, accountability, and the health of this ecosystem, we urge you to read this article carefully and share it across all social media platforms. Silence only benefits those who avoid responsibility. The power to rebuild has always belonged to those who use and believe in the protocol, now is the time to exercise it.

Since late December 2025, NEO co-founders Erik Zhang and Da Hongfei have been engaged in a bitter public dispute over control of the Neo Foundation (NF) and Neo Global Development (NGD), as well as the management of the project’s approximately $461 million treasury.

The conflict centers on long-standing issues of financial transparency, single-signature control of major assets, and governance deadlock. Erik has accused Da of opacity and failing to deliver on financial reporting, while Da has countered that Erik holds excessive control over NEO and GAS tokens and consensus power.

The dispute escalated in April 2026 with competing governance proposals and Erik’s formation of a temporary committee to assume foundation functions. This internal power struggle has had tangible consequences for the ecosystem, most notably with Flamingo Finance, NEO’s main DeFi protocol, which publicly accused NGD and NF of neglecting support and withholding contract control, contributing to FLM’s sharp decline following its Binance delisting. Additionally, long-time contributors, including community manager Boris and core developer Jimmy, have reported significant delays or non-payment of salaries, highlighting operational breakdowns amid the leadership conflict.

Timeline of the Public Dispute

Pre-2025 / Historical Tensions

Longstanding issues around joint oversight, multisig for assets (Da says he long advocated moving NEO/GAS to multisig with both as signers), and decision-making deadlock. Erik has referenced a pre-2025 conversation where Da suggested one founder step back for efficiency. Erik initially agreed but later viewed Da's work on other projects (e.g., references to EON/AEON) as a potential conflict of interest. Discussions around asset transfers around the end of the N3 era.

September 2025

Erik Zhang returns more actively, announces renewed focus on Neo v4.0 development.

Late December 2025 (public explosion, especially ~Dec 31)

Public X statements:

• Erik Zhang accuses Da of failing to deliver on a promised financial report/public statement. Unilaterally states that, per prior agreement, Da will step back from Neo MainNet matters effective Jan 1, 2026, to focus on Neo X and SpoonOS. Demands "complete and verifiable" financial disclosure and full inventory of assets. Accuses non-NEO/GAS assets as being under Da’s personal custody in a "total black box" with no independent oversight. (neonewstoday.com)
• Da Hongfei pushes back hard: Rejects Erik’s framing. Accuses Erik of centralizing control over consensus nodes and the majority of NEO/GAS treasury. Reiterates push for multisig. Commits to preliminary financial figures in early 2026. States "Neo is my brainchild, and I will never abandon it..."

Official Neo accounts acknowledge the dispute but say day-to-day operations of NF/NGD continue and financial reports are coming in Q1 2026.

• January 1, 2026 - Erik formalizes the announcement of Da stepping back from mainnet.
• January 26, 2026 - Founders meet in Hong Kong for mediation/negotiations. No resolution reached.
• Early 2026 (Q1)- Financial transparency efforts ramp up. Da initiates independent review/AUP (Agreed-Upon Procedures) by a Hong Kong CPA firm on NGD assets.
• March 2026 - Da provides updates on the AUP process for major NGD crypto assets (~$193M as of March 30, 2026). Community AMA on governance and reform plans. Erik continues protocol work (NEPs, etc.).
• April 9, 2026 - Da Hongfei publishes detailed restructuring proposal on GitHub (neo-project/neo issue #4526).

Key elements (five measures):

1. Redomicile NF from Singapore to Cayman Islands.
2. New independent 5-member board; both founders barred from board/supervisor roles for first 24 months.
3. "Giveback II" — return significant tokens to community (~49.5M NEO equivalent, including large amounts of NEO and GAS).
4. Replace liquid voting with staked voting (180-day unbonding period).
5. Full asset consolidation under one treasury with multisig, mandatory annual reports, on-chain attestations for large transfers.

• Rationale: End years of "trust me" governance and founder deadlock. "Mutual disarmament" — both sides give up individual (control.neonewstoday.com)
• Mid-April 2026 (Erik's response) Erik publishes counter-proposal. Main points of disagreement:

1. Opposes Cayman redomicile ("cosmetic shell change" that dodges historical accountability).
2. Wants to remain on the board for essential technical oversight.
3. Prioritizes historical accountability — formal investigations into past asset management, potential issues, etc.
4. Emphasizes on-chain verifiable transparency over off-chain legal structures.

• April 14, 2026 - Erik Zhang announces temporary emergency committee (core developers + community leaders) to assume NF functions, citing dysfunction, unpaid staff/community members, and governance failure. Launches transparency.neo.org for continuous public disclosure of on-chain fund uses under the committee's control. Publicly discloses the primary NF fund address under his control (NVg7LjGcUSrgxgjX3zEgqaksfMaiS8Z6e1) and commits to announcing uses going forward. The committee is framed as temporary until community accepts new governance.
• Mid-to-late April 2026 - Public exchanges continue on X with accusations flying both ways (e.g., Erik criticizing Da/NGD management style, media involvement, and calling for verifiable records over "media theater"; Da defending the proposal and noting consistent developer funding). Community discusses and compares the two proposals.
• As of mid-May 2026 - Dispute remains unresolved. Temporary committee active with transparency efforts. On-chain governance examples continue (e.g., community voted to reduce block time). Both sides continue public activity. Project development (Neo X integrations, etc.) proceeds in parallel but governance is clearly strained.
• Summary of PositionsDa's side — Push for structural reset: Independent governance, multisig everywhere, token giveback to community, reduce founder control to break deadlock and single-sig risks. Frames it as necessary evolution.
• Erik's side — Push for accountability first: Full historical transparency and investigations, on-chain verifiable actions, technical continuity (stay involved), avoid what he sees as superficial resets that dodge past issues.

This is a real, damaging public feud between long-time collaborators who built one of crypto's older projects. The large treasury and split custody (especially single-sig holdings) have become the flashpoint. Both have taken steps toward greater transparency and some form of giveback/reform, but they fundamentally disagree on the path and sequencing.

NEO Financial Reports Summary (with focus on the FY2025 report and Binance investment)

1. Historical Context: 2020 Report (Last Major Disclosure Before 2026)As of June 30, 2020 (published ~August 2020):

• Total assets: ~$524.3 millionNEO assets: 42.24M NEO + 4.07M GAS → valued at ~$431.5M Non-NEO assets: ~$50.2M (BTC, ETH, ONT, ONG, fiat) Fund assets: 4,657.88 BTC (cost method) → ~$42.6M

NEO price was much higher in 2018, so valuations were elevated then. This was the last detailed public report for several years.

2. FY2025 Financial Report & Insights (Released ~March 3–6, 2026)

This is the first comprehensive public financial disclosure since 2020. It was released by NGD amid the ongoing founder dispute and Da Hongfei’s push for transparency. Key figures as of December 31, 2025:

• Consolidated treasury: $460.8 million
• Neo Foundation (NF):

1. $224.7M (49%)
2. NGD: $236.1M (51%)

Notes on the report:

• Figures are provisional/preview and subject to further audit and due diligence.
• The treasury could theoretically restore the original ~49.5M NEO genesis allocation, with a surplus of ~25.7M GAS.
• Compared to 2020: NEO holdings slightly down (~2.6%), but GAS holdings grew dramatically and non-NEO assets increased significantly.
• 2025 expenditures: $18 million total.Core operations: ~55.5% (salaries ~36.6%) Community/ecosystem (grants, rewards, partnerships): ~39% Investments: ~5.5%
• Clean spending — no exceptional items, executive distributions, or unusual deployments reported.
• Cumulative funding sources mentioned: 43.4M GAS from protocol revenue, $40.2M from 2022 NGC Fund 1 liquidation, and proceeds from sale of 35k ETH acquired in 2018.

Custody structure (highly relevant to the dispute):

• 25 single-signature + 17 multi-signature wallets.
• 86% of NF assets held in single-signature wallets (this aligns with claims that Erik controls the majority of NEO/GAS).

Transparency & roadmap commitments:

• Transition to multi-signature custody for all assets by end of 2026.
• Move to annual reporting + independent audits.
• Public treasury addresses and more community-driven governance.
• They have engaged global audit firms for due diligence on assets.

3. Investment Portfolio & Binance Stake (Detailed in FY2025 Report)

• Total historically invested: ~$53.3 million
• Deployed 2017–2019 (NGC period): $45.1 million
• Current book value: $11.3 million (heavily written down)
• Performance: 85% of the 2017–2019 investments suffered severe impairments due to bear markets and regulatory changes.
• Holdings include: fund-of-funds, equities (e.g., Cobo, Fiat24, The Block), and vested token positions.

Binance investment (explicitly disclosed):

• Made around the time of Binance’s launch (early/seed-era stake).
• No returns or benefits realized — no dividends, no BNB tokens, no favorable listing terms, and no meaningful business opportunities.
• Previous attempts to agree on valuation/liquidation failed.
• NGD states it intends to actively pursue liquidation and redeploy any proceeds back into the Neo ecosystem.

This is one of the more notable disclosures in the report, as it was previously unconfirmed publicly.

4. Independent Review (AUP) of NGD Binance Account (April 2026)

As part of transparency efforts, a Hong Kong-based CPA firm performed an Agreed-Upon Procedures (AUP) review (not a full audit) on digital assets held by NGD in a Binance account. Verified as of March 30, 2026 (quantities matched management-prepared list):

• USDC: 111,536,196.92
• BTC: 1,110.34
• NEO: 1,254,424.03
• GAS: 1,600,697.17
• USDT: 648,842.43
• ETH: 93.58
• BNB: 27.89

This was the first completed deliverable from the independent review process and provides third-party confirmation of holdings in that specific account.

The FY2025 report is a meaningful step after years of limited disclosure. It shows a substantial treasury with significant liquid assets (BTC + cash) alongside a heavily impaired early investment portfolio that includes a non-performing Binance stake. Full audited numbers and completed multisig transitions are still work in progress. How This Fits the DisputeThe FY2025 report and AUP represent Da/NGD’s transparency push. Erik’s side (via the temporary committee) launched its own transparency.neo.org portal for on-chain disclosure of funds under its control. The split custody (Erik’s single-sig control of most NEO/GAS vs. NGD’s control of BTC, cash, Binance account, and investments) remains a central point of tension. Both sides have committed (in different ways) to moving toward multisig and better reporting.

FREE THE BIRD "Flamingo.Finance"

Flamingo Finance (FLM) is directly connected to the NEO/NGD drama — and it’s one of the clearest examples of how the Erik vs. Da public fight is damaging the broader ecosystem.

Quick Background on Flamingo

• Flamingo.Finance is a major DeFi protocol on NEO N3 (lending, AMM/swap, perpetuals, asset wrapper, etc.).
• It was incubated by NGD (Neo Global Development).
• In 2021, NGD handed over day-to-day operations and maintenance to an independent team (MyMingo). However, NGD/NF kept the smart contract upgrade and admin keys. Flamingo does not control its own contracts.

This structural dependency is the root of the current crisis.

• April 2025 - Binance places Monitoring Tag on FLM.
• Nov 12, 2025 - Binance delists FLM (spot trading) - Major liquidity hit. Binance held a large position (~50M tokens range mentioned in community)
• Late Oct 2025 - Neo Legacy MainNet shutdown. Added pressure on wrapped assets.
• Late Dec 2025 - Erik vs Da public dispute explodes. Support from NGD/NF becomes inconsistent
• Feb–April 2026 - Flamingo team reports no meaningful replies from NGD for 2+ months on critical issues. Platform problems (liquidations paused, bridge liquidity, oracles, etc.) go unaddressed
• April 22, 2026 - Flamingo publishes open letter publicly calling out NGD & NF

Flamingo’s Open Letter (April 22, 2026) – Key Points

Flamingo Finance published a detailed public letter accusing NGD and the Neo Foundation of failing to provide promised support and assets. Main grievances:

• They don’t control their own contracts — Upgrade authority sits with NGD/NF. They cannot fix issues unilaterally.
• Radio silence from NGD: The programming/operational team has received little to no response for extended periods (explicitly more than two months on some matters).
• Unfulfilled commitments: Promised assets/compensation never delivered (e.g., ~100k USDT related to bridge hack fallout, assets tied to Neo Legacy shutdown ~20 BTC + 600k USDT, etc.).
• Bridge liquidity problems: Wrapped assets (ETH, BTC, USDT, etc.) frequently get stuck because NGD/NF fail to top up liquidity in a timely manner.
• Binance delisting response: When Binance put the Monitoring Tag and later delisted, NGD reportedly suggested minting a large amount of new FLM for market makers. Flamingo refused (to avoid diluting holders) and instead injected their own capital (~103k USDT + 20M FLM).

The letter explicitly ties the worsening support to the public conflict between Erik Zhang and Da Hongfei that started in late December 2025.

Direct quote from the letter:

“Flamingo does not hold the keys, does not control the contracts, and does not have unilateral power to make changes… Unless NGD and NF act, hope will not be enough.”

Connection to the Erik vs Da Dispute

• NGD (led by Da) is one of the key power centers in the fight.
• The public quarrel has created decision-making paralysis at the top.
• Ecosystem projects that depend on NGD/NF for support or contract changes are getting neglected.
• No meaningful public statement or coordinated response from NGD or NF when Binance delisted FLM (or during the subsequent price collapse).
• Flamingo is essentially a hostage project — the team does the work, but the keys (and therefore real power) sit with the fighting parties.

What is clear:

• Neglect and dysfunction are real (confirmed in Flamingo’s open letter).
• The internal civil war has distracted NGD/NF and slowed responses.
• The combination of Binance delisting + lack of visible support from the key-holders created a perfect storm for a massive price collapse.

Many in the community see this as collateral damage from the founders’ power struggle rather than a coordinated attack on FLM. However, the lack of any public response or urgency from NGD/NF during a major delisting event looks very bad and fuels suspicion.

Current Status

Flamingo is still operating but in a weakened state. The team has been transparent about the problems and is publicly pressuring NGD/NF to act. Until contract control is transferred or NGD/NF becomes responsive again, Flamingo remains vulnerable to exactly this kind of situation.This is a textbook example of why the ongoing Erik/Da governance fight matters beyond just the $461M treasury — it’s actively harming live ecosystem projects.

Historical Context (Why It Mattered)

Flamingo was, for a long time, by far the most important source of real on-chain activity on NEO N3.

• It drove the majority of meaningful transactions (swaps, lending, liquidity provision, wrapping).
• During the 2020 Mint Rush, it briefly attracted over $100M+ in inflows within days and peaked above $1.5 billion in TVL during the hype phase.
• For years it was the main project actually using the chain for DeFi activity rather than just transfers or low-value spam.

This made Flamingo’s health critical to NEO’s on-chain metrics and perceived usage.

Current Situation

The community has shrunk dramatically due to:

• Binance delisting (Nov 2025) — removed a major liquidity venue and visibility.
• Lack of support from NGD/NF — the open letter from April 22, 2026 highlighted months of poor communication and unfulfilled promises.
• Overall decline of the NEO ecosystem + the ongoing founders’ dispute.

The project still has a dedicated (but small) core community that remains active on Discord (they still run AMAs and have a “Flamingo Hodler Program”), but it is nowhere near its former size or influence.

Flamingo was once the primary engine of real transaction activity on NEO. Today its community is small, its TVL is tiny, and its influence has been heavily damaged by the combination of the Binance delisting and the lack of timely support from NGD/NF amid the broader governance chaos.

The current crisis surrounding Flamingo Finance does not have to mark its end, it can instead become the catalyst for its rebirth. With the community now fully aware of the neglect it has endured, NEO users and supporters have a rare opportunity to take ownership of the project. By forking the codebase, particularly its valuable decentralized order book and full-stack DeFi infrastructure, the community can migrate Flamingo to a more supportive and active blockchain. A new, independent team — driven by contributors who are actually incentivized and accountable — could relaunch the protocol with proper governance, transparent treasury management, and renewed focus on the features that once made it stand out. With coordinated effort, Flamingo could enter a new golden era: one where it is no longer held back by internal politics, but instead becomes a thriving, community-owned DeFi hub built on real utility, active development, and genuine decentralization. The power to rebuild has always belonged to those who use and believe in the protocol — now is the time to exercise it.

Today - The current state of the chain.

• Both founders are publicly pushing for reforms (Da wants to return ~49.5M NEO to the community and move to multisig + independent governance. Erik wants accountability and on-chain transparency).
• The FY2025 financial report shows the treasury is still largely intact.
• No evidence has emerged of funds being siphoned off or laundered.
• The Flamingo situation appears to be a result of internal paralysis from their own fight rather than a deliberate scheme to harm users.
• Long-term single-signature control of massive assets is extremely reckless and could be portrayed as enabling potential misuse.
• The public accusations of “black box” finances and lack of reporting could be used in civil lawsuits.
• The Flamingo open letter shows real harm to users (stuck assets, inability to fix contracts) because NGD/NF held the keys but allegedly didn’t respond.

Legal Exposure

Right now, Erik and Da are primarily exposed to:

• Civil liability (lawsuits)
• Severe reputational damage
• Loss of control through community or legal pressure

However, the situation is volatile. If strong evidence emerges of actual fund misappropriation, deliberate concealment for personal benefit, or intentional harm to users, that could change. The single-sig control of hundreds of millions and the documented neglect of Flamingo are serious red flags that could be used against them in future legal action.

What We Know Publicly

• Jimmy (Core Developer): In early March 2026, he posted that core developers had finally received their salaries after a delay. He described it as a mistake and said everything was now being paid properly.
• Boris (Community Manager): He has been very vocal on X about not being paid. He claims he worked for over a decade and is still owed significant back pay. Unlike the core developers, he says he has not been paid even after the recent releases
• Erik Zhang’s Statement (April 2026): When Erik announced the temporary emergency committee to take over Neo Foundation functions, he specifically mentioned:

His own salary had been suspended for eight months.

There were unpaid staff and community members.

This directly supports the broader picture of financial and operational breakdown at the NGD/NF level.

These cases add concrete evidence to the claims of mismanagement and lack of accountability at the top. When core contributors who have worked for 5–10+ years aren’t getting paid while the foundation controls ~$461 million, it looks extremely bad.

Conclusion

The ongoing conflict between NEO co-founders Erik Zhang and Da Hongfei has exposed deep structural weaknesses in one of crypto’s oldest projects. What began as a disagreement over governance and treasury control has evolved into a prolonged public standoff that has paralyzed decision-making at both the Neo Foundation and NGD. The consequences have extended beyond internal politics, directly affecting ecosystem projects such as Flamingo Finance, which has struggled due to lack of contract control and unresponsive support from key holders. The situation has also led to reports of delayed or unpaid salaries for long-term contributors, further eroding trust within the community. While both sides have proposed reforms — including token redistribution, multisig custody, and greater transparency — the fundamental breakdown in cooperation has left NEO in a weakened position. Without meaningful resolution, the project risks continued decline in on-chain activity, developer retention, and overall credibility. The dispute serves as a cautionary example of how unresolved founder conflicts in mature blockchain projects can inflict lasting damage on the ecosystems they once built.

Disclaimer

This article is compiled entirely from publicly available information, including official statements, financial reports, on-chain data, GitHub proposals, social media posts, and public communications from the parties involved. The content is presented strictly for informational and educational purposes and does not constitute financial, legal, investment, or professional advice of any kind. While every effort has been made to ensure accuracy, the authors and publishers make no guarantees regarding the completeness or reliability of the information presented. Readers are strongly advised to conduct their own independent research and consult qualified professionals before making any decisions based on this article. The authors and publishers shall not be held liable for any losses, damages, or consequences arising from the use of the information contained herein.