After a 92% Drop, the BNB Fund Managed by CEA Industries Is in Turmoil

Changpeng Zhao and his investment company YZi Labs come out swinging against the management of CEA Industries, accused of letting the BNC stock price collapse by more than 90%. This offensive marks a turning point for the future of this treasury company dedicated to BNB. Will shareholders follow CZ in this battle to regain control?

A spectacular drop that pushes CZ to action

Changpeng Zhao, founder of Binance, and YZi Labs launch an offensive against CEA Industries (BNC), a listed treasury company specializing in BNB. 

This Monday, they filed a consent declaration with the U.S. Securities and Exchange Commission (SEC), demanding major changes within the board of directors and management.

The situation is alarming. Indeed, since the peak of $82.88 reached in July 2024, just after the announcement of the creation of its BNB treasury, the BNC stock plunged 92% to close at $6.47. 

The share price even lost an additional 10% the following Monday. This debacle sharply contrasts with the performance of BNB itself, which hit a historic high of $1,369 in October before falling back to $829.

“We believe the current board is in critical need of additional directors with the knowledge and experience to effectively oversee management“, the document asserts. 

YZi Labs, which holds approximately 2.1 million shares representing 5% of the capital (valued at $14 million), had participated in the $500 million PIPE financing this summer, recognizing “the institutional potential” of the project.

However, the honeymoon lasted only one month. YZi Labs representatives quickly contacted Hans Thomas, a company director, to express their concerns. Insufficient communication, media absence, mismanagement: grievances mounted through a dozen documented contact attempts.

Serious accusations of conflicts of interest

The complaints directed at CEA Industries’ management go far beyond communication issues. YZi Labs directly accuses CEO David Namdar and other executives of “promoting and seeking funding for other digital asset treasuries” while they are supposed to focus exclusively on BNC.

These disclosures, dating back to November, raise major ethical questions. How can such a dilution of attention be justified while the company is going through a major crisis? 

Management is “directly responsible” for the poor performance, YZi Labs states bluntly.

The consent declaration asks shareholders to vote on four crucial proposals: expand the board of directors, elect candidates proposed by YZi Labs, and repeal all statutory provisions adopted after July. A consent ballot accompanies the document, allowing each shareholder to cast their vote.

“The stockholders of BNC deserve a well-functioning board that understands its role as a steward of stockholder resources“, insists the investment company. The urgency is clear: “We believe that time is of the essence. Stockholders cannot afford the leadership of the current board and management team.“

A battle for the future of the BNB treasury

This offensive by CZ and YZi Labs illustrates the challenges faced by publicly traded crypto treasury companies. Despite “solid fundamentals” and a “favorable market position,” CEA Industries has failed to capitalize on its assets. 

The paradox is striking: while BNB reached historic highs, the stock meant to reflect its value collapsed.

The names of candidates that YZi Labs wants to impose on the board remain confidential in the filed document. Neither YZi Labs nor CEA Industries responded to requests for comment. 

In short, this battle could redefine governance standards in the crypto ecosystem and determine if traditional investment vehicles can effectively capture the value of digital assets. For ordinary shareholders, the time to choose has come.