CZ, YZi Labs Move to Overhaul BNB Treasury Management After Stock Plunge

Introduction: A Call for Change at a Struggling Digital Asset Treasury

In a significant move highlighting the growing pains of crypto-native financial structures, Binance co-founder Changpeng “CZ” Zhao and his investment firm, YZi Labs, have launched a formal campaign to overhaul the leadership of CEA Industries Inc. (BNC), a publicly traded BNB treasury firm. On November 27, 2025, YZi Labs filed a Preliminary Consent Statement with the U.S. Securities and Exchange Commission (SEC), urging fellow shareholders to vote on proposals to expand the company’s board of directors and elect new nominees. This action comes in direct response to what the filing describes as “the further destruction of shareholder value,” evidenced by BNC shares plummeting 92% from their July high. Despite the underlying asset, BNB, reaching an all-time high of $1,369 in October, the treasury vehicle’s stock has catastrophically underperformed, trading at just $6.47 as of late November. This stark divergence between asset performance and corporate valuation forms the core of a governance clash that could set a precedent for accountability in crypto-focused public companies.

The Mechanics of the Consent Solicitation: A Shareholder Revolt

YZi Labs Files Preliminary Consent Statement with SEC

The primary document driving this corporate narrative is a Preliminary Consent Statement filed with the SEC by YZi Labs. As a shareholder holding approximately 2.1 million shares, or about 5% of BNC’s outstanding stock valued at around $14 million, YZi Labs is utilizing a formal process to enact change without waiting for an annual meeting. The filing is addressed to all shareholders of BNC and includes a white consent card where shareholders can consent to, deny support for, or abstain from the proposals.

The consent solicitation outlines four key proposals for shareholder vote:

1. To expand the size of the board of directors.
2. To elect YZi Labs’ nominees to the newly created board positions.
3. To repeal any provisions to the company’s bylaws that were not in effect when they were initially filed in July.
4. To transact any other business that may properly come before the stockholders.

YZi Labs stated its rationale clearly on social media platform X: “As a long-term partner to the investors in our network, we believe strong governance, transparent communication, and experienced oversight are essential.” The formal filing amplifies this, arguing that the current board is in “critical need of additional directors with the knowledge and experience to effectively oversee management, address the company’s stock price underperformance and operational issues, and restore investors’ faith in the company.”

A Timeline of Discontent: From Partnership to Protest

Mounting Concerns Over Management and Communication

YZi Labs was not always an adversarial force; it was an early supporter and financial backer of CEA Industries’ vision. The firm contributed to the treasury’s $500 million Private Investment in Public Equity (PIPE) earlier in the summer of 2025 because it “recognized the institutional potential of a publicly listed BNB treasury vehicle.” However, dissatisfaction began brewing less than a month after the treasury plan was unveiled.

According to the consent statement, representatives from YZi Labs began contacting board-appointed director Hans Thomas as early as July to express concerns about “the timeliness of investor updates and the firm’s lack of media presence.” This communication was reportedly the first of more than a dozen contact attempts listed in the filing over the subsequent months.

The concerns escalated beyond communication issues. In one instance highlighted in the filing, YZi Labs representatives expressed concerns directly to CEA Industries CEO David Namdar “about the time and attention he was granting to the treasury firm.” The allegation grew more serious in September and again in November, with YZi Labs purportedly learning that Namdar and Thomas were “promoting and seeking funding for other Digital Asset Treasuries (DATs),” despite their primary roles at BNC. For YZi Labs, this constituted a critical breach of fiduciary duty, leading them to conclude that company management is “directly responsible” for BNC’s poor performance.

The Performance Chasm: BNB Soars, BNC Plummets

Analyzing the Stark Divergence Between Asset and Equity

The most compelling data point underpinning YZi Labs’ campaign is the dramatic underperformance of BNC stock relative to its sole major holding, BNB. The timeline is telling:

• July 2025: Following the announcement of its transformation into a BNB treasury vehicle, shares of the company (which previously traded under the ticker VAPE) surged to a high of $82.88.
• October 2025: The underlying asset, BNB, achieved a new all-time high price of $1,369.
• November 2025: Despite BNB’s historic performance, shares of BNC collapsed more than 92% from their July peak to finish at $6.47 on November 27, including a 10% drop on that day alone.

The filing explicitly notes this disconnect: “Since the closing of the PIPE, the company’s share price has significantly underperformed, despite the fact that the value of BNB, the primary asset of the company’s digital asset treasury, has increased over the same time period.” Even as BNB corrected by nearly 40% from its high to trade around $829 amid broader market declines in late November, it still dramatically outperformed the equity representing its treasury.

This divergence raises fundamental questions about the structure’s value proposition. A digital asset treasury is designed to provide traditional market investors with pure-play exposure to a cryptocurrency’s price movement through a regulated stock. When the equity fails to track—or moves inversely to—the underlying asset over a sustained period, it signals severe operational, communicative, or trust-based failures within the managing entity.

Governance in Crypto Finance: A Broader Context

The Role of Transparency and Fiduciary Duty in Digital Asset Vehicles

The clash at CEA Industries Inc. is not an isolated incident but part of a broader evolution in crypto finance. As blockchain-based assets seek institutional adoption, vehicles like Digital Asset Treasuries (DATs), Special Purpose Acquisition Companies (SPACs) focused on crypto, and publicly listed trusts (like those holding Bitcoin or Ethereum) have emerged as bridges to traditional capital markets. Their success hinges entirely on investor confidence in their governance.

Historically, similar tensions have arisen in other crypto-adjacent public companies when perceived mismanagement eroded shareholder value. The core issue often revolves around transparency and alignment of interests. YZi Labs’ allegations—regarding lackluster investor updates, poor media presence, and executives dedicating time to competing ventures—strike at the heart of these requirements.

The filing frames this as a stewardship issue: “The stockholders of BNC deserve a well-functioning board that understands its role as a steward of stockholder resources.” This language is deliberately drawn from traditional corporate governance activism but applied to a novel crypto structure. It underscores that while the assets may be digital and decentralized, the corporate vehicles holding them are subject to established securities laws and expectations for directorial responsibility.

The Path Forward: Proposals and Unanswered Questions

What Comes Next for BNC Shareholders?

YZi Labs has framed its consent solicitation as an urgent call to action. “We believe that time is of the essence. Stockholders cannot afford the leadership of the current board and management team,” the filing states. The firm urges shareholders to support board expansion and the addition of “experienced, competent directors” to oversee management and address operational issues.

However, key details remain undisclosed at this stage. The names of YZi Labs’ proposed board nominees are redacted in the publicly available version of the SEC filing. Furthermore, neither representatives for YZi Labs nor for CEA Industries immediately responded to media requests for comment following the filing’s publication. This leaves shareholders with a detailed critique but an incomplete picture of the proposed solution.

The next steps will involve shareholder voting via the consent cards. If YZi Labs secures sufficient support from other shareholders—a coalition potentially united by frustration over the 92% decline—it could successfully install its nominees and shift corporate strategy. If not, management will retain control amidst profound skepticism from one of its largest initial backers.

Conclusion: A Litmus Test for Crypto Corporate Accountability

The campaign by CZ’s YZi Labs against CEA Industries Inc.’s management represents a pivotal moment for crypto’s intersection with public markets. It moves beyond mere price speculation into concrete issues of corporate governance, fiduciary duty, and operational execution within a novel financial structure.

For readers and market observers, this situation serves as a critical case study highlighting that investing in a crypto-focused public company involves dual layers of risk: volatility in the underlying digital asset and competence in corporate management tasked with stewarding it. The staggering 92% plunge in BNC shares against a rising BNB chart is an extreme example of how severely poor governance can decouple an equity from its intended asset backing.

Going forward, stakeholders should monitor several key developments:

1. The Shareholder Vote: The outcome of this consent solicitation will signal whether institutional and retail shareholders align with YZi Labs’ assessment.
2. Management’s Response: Whether CEA Industries’ board and CEO David Namdar mount a public defense or propose their own strategic changes.
3. Broader Market Implications: How this public dispute influences investor perception of other Digital Asset Treasuries or crypto-linked public vehicles seeking capital.

Ultimately, this episode underscores that transparency and rigorous governance are not optional extras in decentralized finance—they are foundational requirements for building durable bridges between crypto assets and traditional finance. The resolution at BNC will offer valuable lessons on accountability during this formative phase of institutional crypto adoption