A significant governance dispute has emerged at BNB Network Company (BNC), formerly CEA Industries, a prominent publicly traded BNB treasury company in the United States. The conflict arose after major shareholder YZi Labs formally demanded action from asset manager 10X Capital, citing alleged mismanagement and a potential deviation from the company’s core investment strategy.
YZi Labs Issues Formal Notice to 10X Capital
YZi Labs announced that it had issued a notice to 10X Capital, detailing accusations of mismanagement, value-destructive actions, and potential breaches of contractual agreements. This development occurred just months after the two entities partnered on a $500 million private investment in BNC. The relationship has since deteriorated, leading to a proxy fight where YZi Labs is attempting to reconstitute the board through a consent solicitation process, a filing made with the Securities and Exchange Commission (SEC).
Allegations of Mismanagement and Strategy Pivot
The core of the dispute lies in YZi Labs' allegations that 10X Capital, which manages BNC’s digital asset treasury, intends to shift away from accumulating BNB tokens. This alleged pivot contradicts representations made to investors during the summer financing round. YZi Labs, identified as the family office of Binance founder Changpeng “CZ” Zhao, asserts that BNC management has informed market participants of plans to abandon the BNB ecosystem in favor of alternative cryptocurrencies, such as Solana. This alleged change in direction stands in opposition to the investment thesis that initially attracted backers.
Furthermore, YZi Labs claims that recent actions taken by 10X Capital, in conjunction with BNC’s current CEO, have had a detrimental effect on the company’s stock performance. The family office also contends that BNC’s management, largely appointed by 10X Capital, has misled shareholders and significantly diminished shareholder value through a series of actions.
According to YZi Labs, 10X Capital “delayed disclosure of basic information about BNC’s assets, such as: BNB holdings, share counts, mNAV, and lack of a public dashboard providing market-standard treasury transparency similar to other DAT leaders.”
The family office also alleged a breach of fiduciary duty by David Namdar and Hans Thomas, citing their conflict of interest in refusing to amend BNC’s “unconscionable AMA terms with 10X” and their promotion of competing Digital Asset Treasury (“DAT”) ventures, including the alleged use of company resources for these pursuits.
YZi Labs stated in its press release that the combined impact of these actions has resulted in “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.” In contrast, the family office highlighted the superior performance of BitMine Immersion Technologies Inc, which reportedly rose 667% from its pre-announcement close and remained nearly flat, only 2% lower, post-announcement.
Proxy Battle Intensifies with SEC Filing
YZi Labs has escalated the conflict by filing a preliminary consent statement with the SEC. This filing seeks stockholder support to expand the BNC board of directors and elect additional directors. The consent solicitation process allows shareholders to vote via written consent, bypassing the need to wait for a formal shareholder meeting. YZi Labs directly owns approximately 2.15 million shares and holds warrants for additional shares.
The company has demanded 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.”
Additionally, YZi Labs stated that BNC shareholders should receive timely updates detailing 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.”
The notice from YZi Labs also included a demand for 10X Capital to provide written confirmation by December 5th. This confirmation should affirm the company’s commitment to the BNB treasury strategy as previously represented to investors and state that it has not improperly disposed of BNB assets.

