Changpeng Zhao's investment vehicle filed a formal challenge with federal regulators to reshape the board at CEA Industries (BNC), a publicly traded company holding BNB in its treasury. The move comes after shares collapsed 92% from their peak despite the underlying cryptocurrency hitting record highs.
What Happened: Shareholder Revolt
YZi Labs, the investment firm linked to Binance co-founder Zhao, submitted a consent statement Monday with the Securities and Exchange Commission calling for substantial changes to CEA Industries' management structure and board composition. The filing asks BNC shareholders to approve four separate proposals, including expanding the board and installing YZi Labs' preferred nominees to director positions.
The investment firm controls approximately 2.1 million shares of BNC, representing roughly 5% of outstanding stock valued at $14 million as of Monday's close. YZi Labs participated in the treasury company's $500 million private investment in public equity round earlier this summer, citing the "institutional potential of a publicly listed BNB treasury vehicle."
Relations between YZi Labs and CEA Industries management deteriorated within weeks of the treasury plan's July unveiling.
Representatives from the investment firm contacted board-appointed director Hans Thomas less than a month after launch to voice concerns about delayed investor communications and insufficient media engagement, according to the filing.
The document lists more than a dozen subsequent contact attempts, including direct conversations with CEO David Namdar about the time he devoted to the treasury operation.
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YZi Labs alleged in the filing that Namdar and Thomas actively participated in fundraising calls to promote a competing digital asset treasury despite their roles at BNC. After raising these concerns in September, YZi Labs learned the executives were "promoting and seeking funding for other DATs" again in November, the filing states. The consent statement describes company management as "directly responsible" for the treasury firm's underperformance.
BNC shares, which previously traded under the ticker VAPE, surged to $82.88 in July following the treasury announcement. The stock closed Monday at $6.47, down 10% for the day.
BNB reached an all-time high of $1,369 in October but has since declined nearly 40% to trade at $829 as broader cryptocurrency markets retreated.
Why It Matters: Treasury Disconnect
The filing frames the board challenge as urgent action to prevent further shareholder losses at a company that should benefit from its market position. YZi Labs stated that BNC shareholders "deserve a well-functioning board that understands its role as a steward of stockholder resources," arguing that current leadership lacks the knowledge and experience to address the stock's underperformance and operational problems.
"Despite its advantageous market position and strong fundamentals, BNC has significantly underperformed on several levels," the filing reads.
The disconnect between rising BNB values and falling BNC share prices represents a failure of management execution, according to the investment firm. YZi Labs maintains that "stockholders cannot afford the leadership of the current board and management team" and urged immediate action to install experienced directors capable of overseeing management and maximizing shareholder value.
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