CZ-Linked YZi Labs Moves to Take Control of BNB Treasury Firm CEA Industries

Quick Breakdown 

• CZ’s YZi Labs moves to seize control of CEA Industries, citing “destruction” of shareholder value.
• CEA’s stock has crashed nearly 90% from its July peak despite its ambitions to build a BNB treasury.
• YZi accuses current leadership of weak communication, poor marketing, and divided loyalty.

YZi Labs pushes for board overhaul

YZi Labs, an investment vehicle formerly known as the family office of Binance founder Changpeng Zhao, has launched an aggressive campaign to take control of CEA Industries, the publicly traded firm attempting to build the world’s most extensive BNB treasury.

Source: SEC

In a regulatory filing on Monday, the firm said it is seeking to cancel all bylaw changes made since July, expand the size of the board, and install its own slate of director nominees. YZi argued that the steps are needed to stop what it called the “ongoing destruction of stockholder value” and ensure the company is aligned with investors’ best interests.

If approved by a majority of shareholders, the move would give Zhao-linked YZi significant influence over the company’s direction and its massive BNB acquisition strategy.

CEA shares collapse despite BNB treasury pivot

CEA’s stock has seen a dramatic reversal since its explosive pivot into crypto. Shares surged 550% on July 28 when the Canadian vape manufacturer announced plans to transform into a major BNB treasury vehicle, reaching a peak of $57.59.

Since then, the momentum has evaporated. The stock has plunged roughly 89%, ending Monday at $6.47, wiping out more than 20% so far this year, well below its pre-pivot price.

The company had touted a $500 million PIPE investment, backed in part by YZi Labs, to accelerate its BNB strategy. That pivot also brought in 10X Capital’s David Namdar as CEO and added several 10X executives to the board. In October, YZi Labs announced its support for 10X Capital’s establishment of the BNB Treasury Company. 

YZi criticizes leadership, suggests CEO change

In its filing, YZi faulted CEA’s management for slow investor communications and minimal marketing efforts, arguing that stakeholders have been left in the dark despite the high-stakes treasury strategy. It further accused CEO David Namdar of lacking “devotion and loyalty” to the company, claiming he had publicly promoted other crypto-focused treasury ventures.

YZi suggested that a newly reconstituted board should evaluate whether CEA needs fresh leadership at the top.