CEA Industries, formerly known as the largest publicly traded BNB treasury company in the United States and now operating as BNB Network Company (BNC), has issued a statement directly addressing a warning from YZi Labs. YZi Labs accused the firm’s current management of attempting to renege on their agreement.
CEA Industries has revealed steps it has taken to de-escalate the crisis, as YZi Labs now wants the company to make several concessions if it wishes for the partnership to remain intact.
In the statement issued by CEA Industries Inc., the company acknowledges recent shareholder communications by YZi Labs Management Ltd., including the press release it issued on December 3, 2025. However, the company denied the statements in the press release, claiming it remains committed to becoming the world’s largest BNB treasury company.
It claimed that since the July PIPE investment, BNC has never considered an alternative token for the company’s digital asset treasury strategy, nor launched competitive DAT ventures.
CEA Industries' Response to the Crisis
YZi’s press release came two days after it filed a Preliminary Consent Statement, which proposes to expand and reconstitute the board with a majority of independent directors. According to CEA Industries, they conducted an extensive months-long search process that led to the appointment of independent directors Annemarie Tierney and Carly E. Howard. These experienced board members possess extensive relevant digital asset legal and regulatory experience, along with significant public company corporate governance knowledge.
The company reiterated in its statement how much it values its relationship with YZi Labs and claims it is committed to engaging in constructive discussions with YZi, other shareholders, and partners, all with the aim of building long-term shareholder value.
To achieve this, the firm’s board has reportedly reached out to YZi to create an open line of dialogue regarding YZi’s concerns and potential solutions.
Background of YZi Labs' Concerns
YZi Labs announced that it had issued a notice to 10X Capital, citing mismanagement, value-destructive actions, and threatened violations of contractual agreements, just a few months after the two parties partnered on a $500 million private investment in the company. Things began to deteriorate in late November when Yzi Labs filed a preliminary consent statement with the SEC, officially launching a proxy fight to overhaul the board. YZi Labs accused the board of planning to pivot away from accumulating BNB tokens despite representations made to investors during the summer financing round.
YZi Labs contended that the company management had informed market participants of plans to abandon the BNB ecosystem for alternative cryptocurrencies such as Solana, contradicting the investment thesis that attracted backers.
YZi Labs also claimed that the recent moves by 10X Capital, in collaboration with the current CEO of BNC, have negatively impacted the company’s shares. They added that the BNC’s management, most of whom they claim were appointed by 10X, have misled shareholders and significantly damaged shareholder value through various actions.
In its press release, YZi Labs claimed the combined impact of both accused parties has “led to severe underperformance of BNC’s stock relative to peers, trading approximately 19% below the pre-PIPE announcement level and 87% below the post-announcement level.”
Cryptopolitan reported earlier in the week when Yzi Labs filed a preliminary consent statement with the SEC seeking stockholder support to expand the board and elect additional directors. The company demands that “10X, and its hand-picked directors and CEO, amend the BNC AMA and release to BNC’s shareholders the fundamental information expected of a publicly traded DAT, including an operational plan, an asset-management methodology, a risk framework, a reporting package, a personnel overview, and evidence of systems, controls, and infrastructure.”
It also wants BNC shareholders to be provided with timely updates that reflect the amount of “BNB acquired and held, the number of outstanding shares of BNC, and other critical and market-standard information customarily disclosed by other DATs.”
A written confirmation from 10X that it will comply with the BNB treasury strategy, as represented to investors, and “that it has not improperly disposed of BNB assets,” was also required by YZi Labs.