YZi Labs Moves to Seize Control of CEA Amid Sharp Stock Decline

Binance founder Changpeng Zhao’s YZi Labs is pushing to overhaul the leadership of CEA Industries, the largest public holder of BNB. In a filing submitted Monday, YZi Labs asked shareholders to reverse all bylaw changes made since July, enlarge the board, and install its own nominees. 

The group argued that these steps are needed to stop what it described as ongoing harm to shareholder interests and to redirect the company’s direction.

If approved by a majority of investors, YZi would gain effective control of the firm. This comes as tensions rise around CEA’s performance and its handling of the high-profile pivot into BNB-related activity.

Shares Plunge After Crypto Pivot

CEA Industries drew attention in late July after announcing plans to pivot from its vape business and become a major public holder of BNB. Its stock jumped 550% on the day of the announcement, reaching $57.59. 

However, since then, shares have plunged about 89% from that peak and closed Monday at $6.47, down more than 10% on the session. The stock now trades below its pre-pivot levels and is down over 20% year-to-date.

YZi played a role in the CEA’s major $500 million private investment deal in August, funding the company’s new BNB strategy. The shift also brought in 10X Capital CEO David Namdar as CEA’s new chief executive, along with several executives from the same firm joining the board.

In its filing, YZi claimed the current leadership has not delivered timely updates to investors and has done little public engagement to support the company’s goals. The group also accused Namdar of focusing attention on other crypto treasury projects and suggested the reconfigured board should consider selecting a new CEO.

BNB Slides but Still Outperforms CEA

BNB, the token closely tied to Binance and widely used on its platform, is trading near a three-month low of $829. It has fallen nearly 40% since reaching an all-time high of $1,367 in mid-October, a decline consistent with broader market weakness. 

CEA currently holds 515,054 BNB purchased at an average cost of $851.29. Because the token now trades below that level, the firm’s mNAV, comparing the company’s worth with the value of its holdings, sits at 0.79x. This suggests the gap between its market performance and its sizable BNB position.