YZi Labs Accuses CEA Industries Board of Entrenchment, Manipulation

YZi Labs, a major investor in blockchain-focused company CEA Industries Inc., which trades on the Nasdaq under the ticker BNC, has launched a public campaign against its board, alleging efforts to silence shareholders.

The clash puts corporate governance and CEA’s crypto treasury direction under scrutiny, as YZi claims the board has strayed from the BNB-focused plan that originally drew investor backing.

Shareholder Battle Erupts Over Strategy and Governance

In a social media post on January 7, YZi said it has filed preliminary materials with the SEC to solicit shareholder support for board changes at BNC, claiming the company’s board has engaged in “manipulative behavior.” The core issues are a recently adopted “poison pill” strategy and amendments to corporate bylaws.

It argued that those moves were designed to block shareholder accountability and delay their ability to act through written consent, calling them an “entrenchment” tactic. The venture firm claimed it had previously warned the board that such actions could be a breach of fiduciary duty.

The conflict is fueled by a strategic disagreement, with YZi Labs, which supports BNC’s original focus on BNB Chain-related strategies, saying it has heard from numerous shareholders alarmed by a potential “pivot away from BNB.”

They specifically rejected BNC’s claim that it never considered alternative digital assets for its treasury, pointing to a November 2025 conference where BNC CEO David Namdar reportedly commented on contemplating a switch to assets like Solana (SOL).

This internal debate is happening against a dynamic market backdrop where rivalries are shifting. For instance, XRP recently flipped BNB in market cap after a notable price increase on January 3, with some analysts making bullish predictions for the Ripple token.

YZi’s statement accused the BNC board of an “apparent focus on entrenchment rather than stockholder interests” and urged it “to avoid further manipulative behavior.”

Broader Implications for Crypto Corporate Governance

This public dispute has thrown a spotlight on governance challenges within crypto-linked public companies. YZi Labs is framing its campaign as a fight for shareholder rights and strategic fidelity at BNC, urging the board to guarantee a “free and fair” election process.

A key point of contention is the timing of the 2025 Annual Meeting, which YZi noted has already been delayed past the company’s December 17 anniversary. They view the meeting as a “critical venue” for shareholders to reshape the board.

The market is now watching to see if other BNC shareholders will rally behind YZi’s consent solicitation, with the outcome possibly influencing how leadership at similar companies balances strategic pivots with shareholder alignment. And with a board election looming, this battle between a determined investor and an incumbent board preparing its defenses could define BNC’s path forward.

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