CZ’s YZi Labs Pushes for Control of BNB Treasury Firm CEA Industries: Report
BASED
BNB
GBTC
PIPE
GAINS
CZ’s YZi Labs wants to take control of CEA Industries by reversing bylaw changes, expanding the board, and installing its own nominees, according to a recent report. The firm filed a written consent statement with the SEC that asks shareholders to support a major leadership overhaul at the publicly traded BNB treasury company. It reportedly follows months of tension over slow execution, missed updates, and a widening gap between the firm’s market price and its crypto holdings.
What Is YZi Labs Trying To Change at CEA Industries?
YZi Labs wants to unwind recent bylaw changes, add more directors, and place its own nominees on the board. According to the filing, these steps are necessary to fix operational delays and restore confidence among investors. The action is addressed to all shareholders and includes a white consent card where holders can consent, reject, or abstain from each proposal.
YZi Labs holds about 2.1 million BNC shares, approximately 5% of the company. Based on Monday’s prices, the stake is worth around 14 million dollars. The firm previously invested in CEA through a 500 million dollar private investment in public equity, often called a PIPE. This transaction helped reposition CEA as the largest publicly listed BNB treasury vehicle.
The consent solicitation argues that the current board has failed to communicate on time, failed to complete filings, and failed to create a proper investor relations strategy. YZi Labs claims these missteps have damaged the stock and widened the gap between the company’s market value and the value of its BNB holdings.
Key Reasons Behind YZi Labs’ Move
- Slow and incomplete investor updates
- Few or no media and marketing efforts
- Alleged promotion of competing crypto treasuries by the CEO
- Delays in filing important documents
- Falling stock price and widening market net asset value discount
- Concerns about board independence and oversight
- Incomplete filings that slowed regulatory reviews
Shareholders and the Written Consent Process
In the United States, a written consent process allows shareholders to take action without a formal meeting. If a majority of outstanding shares sign the white card, YZi Labs can win control without a traditional vote. The filing states that this method is needed to stop further destruction of shareholder value.
Institutional investors and long-time market participants have seen similar battles in traditional finance. Activist campaigns in companies like ExxonMobil and Bed Bath & Beyond show how investors can push for board changes when they believe leadership is underperforming.
The same dynamic is now appearing in crypto-linked firms.
Why Is CEA Industries Important in the BNB Ecosystem?
CEA Industries was once a nicotine vape manufacturer. In July, it rebranded as BNB Network and announced plans to become the largest BNB-focused treasury vehicle in the country.
The firm’s stock surged more than 600 percent after the announcement. The PIPE round led by YZi Labs and 10X Capital included 400 million dollars in cash and 100 million dollars in crypto. This gave the firm significant public visibility and made it a key bridge between institutions and the broader Binance ecosystem.
The pivot was promoted as a way to offer transparent on-chain treasury management using one of the most traded digital assets in the world. Institutions that wanted BNB exposure but could not hold crypto directly were considered potential buyers of the stock.
Yet momentum faded quickly.
CEA’s Stock Performance Since the Pivot
The company’s shares have fallen sharply from their July peak of 57.59 dollars. On Monday, CEA closed at 6.47 dollars, down more than 10 percent on the day. This is an 89 percent drop from its high. The stock is now trading below pre-pivot levels, even though BNB is up more than 17 percent this year.
This performance has increased pressure on the leadership team to justify the firm’s strategy.
CEA reports holdings of more than 515,000 BNB at an average cost of 851.29 dollars. Its market net asset value ratio has slipped to 0.79 times. This means its stock trades at a discount relative to its crypto holdings. In the closed-end fund world, discounts this wide often trigger activist campaigns.
That is exactly what is happening here.
What Problems Does YZi Labs Highlight?
YZi Labs says the board and management have made basic execution errors. The firm says filings were delayed and incomplete. It says investor relations materials were missing key information. It mentions a lack of outreach to institutions that would normally buy a public crypto treasury stock.
The filing also claims that CEO David Namdar and other 10X Capital executives were promoting other digital asset treasury efforts at the same time. YZi Labs argues that this raises questions about focus and loyalty. It cites multiple attempts to contact the board to warn about these issues.
How Do These Governance Issues Affect a BNB Treasury Strategy?
Treasury companies must operate with precision. They need to report their holdings clearly. They need to show how they manage risks. They must maintain strong investor communication, because the value of the stock depends on trust that assets are held safely and updates are delivered on time.
For instance, Grayscale Bitcoin Trust spent years facing a large discount because communication was limited and redemption paths were unclear. Closed-end funds in the energy sector, like some MLP funds, also faced activist pressure when discounts widened due to weak governance.
Cryptocurrency treasuries face similar pressures.
When BNB trades near a three-month low and the company’s stock falls even more, the board must address the mismatch. YZi Labs says leadership failed to do so.
What Happens if YZi Labs Gains Control?
If its proposals win support, YZi Labs can expand the board and replace the leadership. It could also initiate a review of the business, including the potential selection of a new CEO. Governance experts note that written consent victories often lead to quick restructuring.
Any changes will focus on fixing the discount between the stock and the company’s crypto holdings. They will also focus on improving reporting standards and communication with investors.
CEA has not yet responded publicly to the allegations.
Conclusion
YZi Labs believes CEA Industries has failed to deliver timely updates, strong market communication, and consistent leadership. Its consent solicitation seeks to reverse bylaw changes, expand the board, and elect new directors.
If the proposals succeed, YZi Labs could gain effective control of the company and restructure its leadership. The final outcome will shape investor confidence in BNB-based treasury models and influence how public crypto companies manage governance risks.
Resources:
Regulatory filing by Yzi Labs: Written consent statement with the SEC
Report by The Block: Changpeng Zhao-backed YZiLabs launches boardroom coup at BNB treasury firm BNC
Report by CoinTelegraph: CZ’s YZi Labs moves to take over board of flatlining BNB treasury
