‘China’s Ethereum’s’ civil war, Japan to embrace Bitcoin ETFs: Asia Express

New Year’s fireworks spark over Neo co-founders battle

Neo co-founders Erik Zhang and Da Hongfei clashed on New Year’s Eve in a heated public exchange, accusing each other of mismanaging the blockchain’s treasury and misrepresenting years of internal governance decisions.

Neo is a long-running smart contract network founded in 2014 that rose to prominence during the 2017 bull market, when it was widely dubbed “China’s Ethereum.” The nickname reflected its early focus on smart contracts and regulatory-friendly design, similar in ambition to Ethereum but marketed as a domestic alternative for China’s tech ecosystem.

Zhang said he originally stepped away from Neo leadership after Da argued that joint oversight of the foundation was slowing the project. 

“Either you step away, or I do. I’m fine with either outcome,” Zhang claimed Da told him in a private meeting. “Acting in what I thought was Neo’s best interest, I agreed on the spot that I would step aside.”

Zhang said the decision was not neutral. He claimed Da began developing a separate public blockchain project and said his removal “eliminated internal checks, making it possible to leverage Neo’s resources while building a separate, personally controlled project that directly competes with Neo.” He called it “a fundamental conflict of interest” and said he returned to demand “full, verifiable financial disclosure of [Neo Foundation’s] assets.”

Da rejected Zhang’s account outright. “False,” he wrote, saying the dispute stemmed from years of delayed efforts to secure the treasury.

“A blockchain project’s treasury should be secured by multisig, not by one man after years of launching. It is not negotiable,” Da said, accusing Zhang of intentionally stalling the handover.

Zhang claimed “the vast majority of Neo’s assets” beyond NEO and GAS had been under Da’s sole control for years. Da responded that “NEO [and] GAS were always the super majority of [Neo Foundation’s] assets,” and then accused Zhang of “lying and fabricating facts” and pointed to an upcoming financial report.

Neo Foundation distanced itself from the public kerfuffle, stating that the disputes will not affect its operations. It added that financial reports will be released in the first quarter.

Asia’s major markets are warming up to crypto ETFs

Japan sent a clear signal that cryptocurrency exchange-traded funds (ETFs) are moving closer to the regulatory mainstream.

Finance Minister Satsuki Katayama said in her speech at the New Year opening ceremony on Monday — locally known as the “daihakkai”— that 2026 marks a turning point for digital assets, and the first year of “full-scale” digitalization.

“To ensure citizens benefit from digital and blockchain-based assets, the role of exchanges and market infrastructure will be essential,” she said, according to a machine translation. “In the US, crypto assets are increasingly used via ETFs as inflation hedges, and Japan must also pursue advanced fintech initiatives.”

Japan’s messaging and recent developments in South Korea suggest that Asia’s largest economies are warming to crypto ETFs even as formal approvals lag behind demand.

On Friday, Korea Exchange Chairman Jeong Eun-bo said that the exchange is operationally ready to list crypto ETFs and derivatives, despite regulators still debating whether digital assets qualify as eligible underlying securities.

Japan’s regulatory position is already shifting. Crypto assets have been regulated under payment and custody frameworks rather than securities law, limiting their eligibility as ETF underlyings. That is set to change as Japanese regulators are preparing to reclassify crypto as a financial product under securities legislation.

Progress has been more concrete elsewhere in Asia. Hong Kong approved spot Bitcoin and Ether ETFs in 2024, allowing products listed on the Hong Kong Exchanges and Clearing to begin trading, albeit with modest inflows compared with US counterparts.

Vietnam approves USDT conversion pilot

Vietnamese authorities in Da Nang city have reportedly approved a pilot allowing a local company to convert USDT stablecoins into Vietnamese dong and back.

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