On January 26, 2026, the governance differences between Neo's two co-founders, Erik Zhang and Da Hongfei, were completely exposed: after three consecutive demands were rejected, Erik publicly called for Da to resign, bringing a long-standing internal dispute over project direction into the public arena. At the same time, the UK Financial Conduct Authority (FCA) pushed ten cryptocurrency regulatory proposals into the final consultation stage, setting March 12, 2026 as the feedback deadline. On one side, there was a conflict within the founding team over “centralized management vs. transparent decentralization” regarding funds and power; on the other, London was attempting to reshape the regulatory order of the cryptocurrency business using traditional financial standards. These two lines overlapped in time and logically contrasted: when internal governance of blockchain projects fell into disorder, external regulation was trying to reintegrate the industry into a predictable trajectory with a tighter regulatory framework.
The Publicization of the Founders' Civil War: Calls for Resignation and Governance Rifts
● Timeline of the Conflict: On January 26, 2026, at 8 AM UTC+8, after multiple internal communications yielded no results, Erik's three consecutive governance and financial demands were rejected, leading him to publicly call for Da Hongfei to resign. This action transformed the responsibility disputes that originally belonged to the foundation and core team into a public conflict directed at the community and external observers, making Neo's governance issues no longer just a technical route dispute, but a concentrated presentation of mutual distrust between the founders.
● Escalation of Accusations and Counter-accusations: In social media and public responses, Erik targeted the use of funds and decision-making mechanisms, emphasizing that his proposals were aimed at controlling risks and enhancing transparency; Da Hongfei countered that Erik was distorting facts, packaging a highly centralized management model as “governance reform,” and publicly stated that the requirement for “every transaction and all expenditures to be approved by me” was essentially “dictatorial” financial control. The discourse quickly shifted from technical and institutional issues to questioning personalities and motives.
● Internal Struggles Spill Over into Governance Crisis: As the statements from both sides were amplified by the media and community, Neo's “civil war” was no longer seen as a matter of internal collaboration but as a referendum on the legitimacy of governance structures. Support and opposition voices revolved around the personal credibility, historical contributions, and future directions of the founders, turning what could have been resolved through negotiation into a governance crisis involving community and public opinion, dragging Neo's brand and credibility into the center of the dispute.
Who Holds Power? From “Transaction Approval” to Limited Cooperation
● Controversy Over Centralized Financial Approval: According to public reports, one of Erik's core proposals was to require “every transaction and all expenditures to be approved by me,” establishing a highly centralized financial mechanism that scrutinizes funds related to the project on a case-by-case basis. From the supporters' perspective, this was seen as a necessary tightening to prevent improper use of assets and ensure fund security; however, in the opposition's and Da Hongfei's statements, this mechanism was labeled as typical “dictatorial” management—consolidating financial decision-making power that should involve multiple parties into one person, undermining the internal checks and balances of the team.
● Emphasis on Limited Cooperation and Multi-party Checks: Unlike Erik's emphasis on strengthening personal approval authority, Da Hongfei proposed a path he referred to as “limited cooperation” in his public response. He stressed that by defining the scope of cooperation and clarifying boundaries of division of labor, it was possible to retain space for multi-party participation in decision-making and operational flexibility without abandoning oversight and collaboration. For him, completely locking transactions and expenditures under a single approver would weaken the team's responsiveness and innovation capability, while limited cooperation sought to find a compromise between risk prevention and maintaining vitality.
● Power Tension Behind Route Discrepancies: The debate over who “tightens” control over funds and approval authority is not an isolated incident but a concentrated reflection of Neo's long-standing route discrepancies. On one side is Erik's long-standing advocacy for strengthening core chain control, emphasizing the security, stability, and centralized governance efficiency of the main chain; on the other side is Da Hongfei's push for a multi-line layout approach with EON and other parallel projects, hoping to open new ecological spaces through horizontal expansion. In specific governance operations, centralized management means faster decision-making and stronger single-point constraints, while transparent decentralization emphasizes auditable, accountable processes and multi-node balance. The ideological conflict between the two ultimately crystallized in the struggle over the approval authority for every fund and every expenditure.
Where is the Money and the Project Going? Financial Report Commitments and Equity Operations
● Financial Report Commitments and Trust Restoration: In response to external doubts about fund usage and internal governance, Da Hongfei promised to release quarterly financial reports, attempting to address “black box” concerns through periodic disclosures. This move formally aligns with the practices of traditional enterprises and compliant institutions, indicating the project party's willingness to accept more frequent external scrutiny. For the already torn trust gap, quarterly financial reports cannot immediately mend the rift between the founders, but from the community's perspective, they at least provide a transparent window that can be continuously tracked and cross-verified.
● $1 Million Spot Trade and Equity Redistribution Imagination: According to public information, Da Hongfei also mentioned plans for a $1 million spot trade to enhance NGD equity. Technically, this is a specific asset adjustment operation, but in the community context, it can easily be interpreted as a signal for a redistribution of interests and discourse power: whoever leads this transaction is closer to the core of fund flow and equity structure. Since the outside world does not know the current complete equity structure of NGD and the details of past changes, this operation is more likely to be projected as a symbol of “power holders strengthening control” or “reshaping the corporate governance landscape.”
● How Financial Arrangements Reshape Routes and Power: Placing these actions back into the context of Neo's long-standing route discrepancies reveals a cyclical relationship between resources and discourse power: Erik hopes to focus resources more on the core chain itself, ensuring the main chain's security and technological advancement through strict governance; Da Hongfei, on the other hand, hopes to explore new growth curves through parallel projects like EON, while funding, equity, and financial report disclosure methods serve as practical tools for prioritizing one route over another. Whoever holds the power of fund allocation effectively draws a thicker line for the strategic choice between “main chain vs. parallel projects,” which is why financial transparency and asset operations have been pushed to such a core position in the dispute.
London’s Move: FCA's Ten Proposals and the Formation of a Compliance Framework
● Regulatory Timeline and Procedural Nodes: Parallel to the internal storm at Neo, the UK FCA has accelerated its actions on the regulatory side. The official has pushed ten cryptocurrency regulatory proposals into the final consultation stage, clearly stating March 12, 2026 as the deadline for market participants to submit feedback. This means that the compliance boundaries for cryptocurrency-related businesses in the UK are about to shift from “principle discussions” to “detailed implementation,” and for project parties planning to develop in London or connect with UK funds, the window for adjustment and dialogue is rapidly narrowing.
● Incorporating Cryptocurrency Business Under Traditional Financial Standards: According to disclosed information, the core of these ten proposals focuses on key dimensions of business conduct standards and asset protection in traditional financial regulation, with the logic of incorporating cryptocurrency businesses such as trading platforms, custody, and asset services into a relatively mature framework of regulatory agencies. This path is not simply about applying old rules but aims to place an industry that was originally highly “self-regulated” into a more familiar and predictable regulatory context through behavioral norms and asset safety bottom lines, making risk identification and responsibility allocation closer to the existing logic of the financial industry.
● Long-term Layout of Roadmap and Licensing Center: This round of proposals is not an isolated action but part of the UK government's overall cryptocurrency roadmap. The official roadmap is to gradually open up cryptocurrency service provider licenses after completing rule formulation and consultation, making London a hub for compliant cryptocurrency businesses. For projects hoping to obtain institutional funds and traditional financial cooperation, whether they can secure a passport to the UK or UK-related markets in the future will largely depend on whether they meet the FCA's compliance standards based on traditional finance.
From Neo Storm to Global Compliance: The Survival Challenge of Projects Under Dual Pressure
● Contraction Effects on Both Ends: On one end is the internal disorder caused by the public rift between Neo's founders, and on the other end is the external tightening driven by the FCA's push for standardized regulation and strengthened business conduct and asset protection. For the entire cryptocurrency industry, the combination of both creates a dual pressure: if projects cannot establish credible checks and transparent mechanisms in internal governance, they will face increasingly specific and rigid regulatory requirements externally, and the gray areas that could have been concealed by “technical narratives” are rapidly shrinking.
● Compliance Challenges for Governance Controversy Projects: In the context of gradually embedding traditional financial standards, projects like Neo, which have public governance disputes and clear route divisions, will be the first to face compliance scrutiny. Regulatory agencies, when evaluating license applications and risk levels, will not only look at technical security and asset structure but also consider whether the decision-making mechanism is clear, whether responsibilities and powers are well-defined, and whether there are irreconcilable major disputes among the founders. Such public governance rifts are easily seen as potential operational and ethical risks, forming implicit negative labels when obtaining banking channels, institutional cooperation, and licenses.
● Moving Towards a New Normal of Auditable and Accountable Governance: Looking to the future, cryptocurrency projects must become more auditable and accountable in financial transparency, division of responsibilities, and multi-chain layouts. In terms of finance, it is not just about committing to quarterly reports but establishing a disclosure system compatible with traditional audits and regulatory reports; regarding responsibilities, there needs to be a feasible governance charter formed among founders, foundations, and operational entities to prevent personal will from overriding the system; in terms of multi-chain and multi-project layouts, clear logic must be provided in resource allocation and information disclosure to prevent doubts about “the main chain being drained” or “new projects becoming funding black boxes.” Only by evolving simultaneously along these three lines can projects hope to secure a place in the new regulatory landscape in compliance centers like London.
The Intersection of Civil War and Regulation: The Next Hurdle for the Cryptocurrency Industry
This “civil war” among Neo's founders exposes many common governance weaknesses in blockchain projects: unclear responsibilities, financial opacity, and a lack of institutional decision-making mechanisms at route forks. The ten regulatory proposals pushed by the UK FCA represent another external force—reshaping the industry's game rules with traditional financial logic, bringing behaviors and assets into the realm of accountability. When internal rules fail and external rules strengthen, these two forces converge at the same time, forcing the industry to undergo a collective re-learning about “who decides, how money is spent, and who is responsible when problems arise.”
In terms of financial transparency, decision-making mechanisms, and multi-chain strategies, if project parties want to secure licenses and connect with institutional funds in the coming years, they must proactively complete self-upgrades: moving from temporary commitments to institutionalized disclosures, from founder-led governance to a multi-party checks and balances framework, and from vague ecological expansion narratives to multi-chain layouts where funds and resources can be verified item by item. London is not the only compliance battleground, but it is likely to become a template for the next round of selection—only those projects that can self-correct in the Neo-style storm will qualify to continue participating in the game under the new regulatory landscape.
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