Conflict in CEA Industries: YZi Labs Accuses 10X Capital of Destroying Value Through Threat to Abandon BNB

YZi Labs, an investment firm associated with the family office of Changpeng Zhao (CZ), former CEO of Binance, has sent an official notice to 10X Capital Asset Management LLC, the asset manager of CEA Industries. In it, YZi Labs warns shareholders about the actions of 10X Capital, which, in their view, are aimed at destroying the company's value.

According to YZi Labs, they have received reliable information that 10X Capital is threatening to force BNC to abandon its BNB treasury strategy just three months after its implementation. Instead, it proposes investing in alternative cryptocurrencies such as Solana (SOL). This contradicts the initial agreements made during the raising of $500 million through a private investment in public equity (PIPE) in July-August 2025, when CEA Industries announced its focus on BNB as the primary reserve asset.

Details of the Accusations

YZi Labs accuses 10X Capital of a series of violations:

• The company has not provided shareholders with basic data such as NAV (net asset value) per share, on-chain asset confirmations, or a public dashboard for treasury monitoring.
• The CEO and board members of CEA Industries are allegedly using BNC resources to manage competing projects in the digital asset space (DATs) without proper disclosure.
• According to YZi Labs, 10X Capital is ignoring commitments to allocate the majority of capital to BNB, which was a key point in investments from over 140 investors, including Pantera, GSR, and Nano Labs.

In the notice, YZi Labs demands from 10X Capital written confirmation of adherence to the BNB strategy by December 5, 2025, as well as a complete governance update: appointment of independent board members, creation of a public treasury dashboard, and an asset audit. If the demands are not met, YZi Labs threatens to initiate a shareholder vote to change the leadership.

Background of Events

CEA Industries, formerly known as CEA Industries Inc. (NASDAQ: CEAD or VAPE), shifted in 2025 from controlled environment agriculture and vaping business to a focus on crypto treasury. In July, the company changed its ticker to BNC (BNB Network Company) and announced a strategy to accumulate BNB, aiming to reach 1% of the total token supply (about 1.4 million BNB, worth over $1.2 billion at current prices).

Currently, BNC holds about 515,000 BNB worth $465 million, making it the largest public holder of BNB. The investments were supported by YZi Labs and 10X Capital, with an emphasis on institutional entry of BNB into American markets. However, after the announcement, the company's shares fell 87% from their peak, which analysts attribute to a lack of transparency and internal conflicts.

Market Impact

This conflict could affect the price of BNB, as BNC locks up 0.5% of the total token supply, creating real demand for staking and legitimacy in the ecosystem. For retail BNB holders, this is potentially positive in the long term, but short-term drama could lead to volatility. BNC shareholders, on the other hand, have already suffered significant losses, and a victory for YZi Labs could clean up the company, making it the best regulated player in the BNB space.

YZi Labs emphasizes that their goal is to protect shareholder interests and ensure compliance with promises. 10X Capital has not yet commented on the situation. The market is watching the developments, as this could set a precedent for other companies with crypto treasuries, such as those investing in Solana.