Binance founder Changpeng Zhao’s YZi Labs has launched a bid to stack the board of a BNB buying company it helped to bankroll with its own nominees, citing “destruction” of stockholder value.
In a regulatory filing on Monday, YZi Labs said it wants to cancel all of the company’s bylaw changes since July, expand the size of CEA’s board and elect “our highly-qualified nominees as directors.”
YZi told shareholders that the measures “are necessary to address the continued destruction of stockholder value at BNC and to ensure that the Company is being run in a manner consistent with your best interest.”
If the majority of outstanding shareholders agree, then YZi, which formerly marketed itself as Zhao’s family office, would essentially wrest control of the world’s largest public BNB (BNB) treasury company.
BNB is close to Zhao and Binance, which reportedly owns the majority of the supply.
CEA shares have tumbled since YZi’s backing
Shares in CEA Industries (BNC) have dropped around 89% since its peak of $57.59 on July 28, the same day the Canadian vape company’s stock surged 550% on its plans to become the largest BNB treasury company.
It ended trading on Monday at $6.47, down more than 10% on the day. The stock is down over 20% so far this year, trading below its price before it pivoted to crypto.
YZi helped bankroll CEA’s $500 million private investment in public equity (PIPE) deal that closed in August, which CEA pitched was to help “establish the largest publicly listed BNB Chain digital asset treasury strategy in the world.”
CEA’s crypto pivot saw investment firm 10X Capital’s CEO, David Namdar, installed as CEO, and multiple 10X Capital executives joining CEA’s board.
However, in its latest filing, YZi claimed that CEA’s management has been slow to provide investor updates and has made “little to no media or marketing efforts” to promote the company.
Related: DATs bring crypto’s insider trading problem to TradFi: Shane Molidor
YZi also accused Namdar of a “lack of devotion and loyalty” to CEA, claiming he had promoted other crypto treasury companies, and floated that the new board “should explore the selection of a new CEO.”
CEA Industries did not immediately respond to a request for comment.
BNB trades low, but outperforms CEA
BNB, a token deeply tied to Binance that offers perks to BNB holders on its platform, is trading at a three-month low of $829.
It has lost almost 40% since reaching an all-time high of $1,367 in mid-October, but has fallen in tandem with the broader crypto market due to broader macroeconomic concerns.
Despite its recent decline, BNB is up 17.8% so far this year and has traded slightly down over the last 24 hours.
CEA Industries reports holdings of 515,054 BNB purchased at an average cost of $851.29, which has pushed its mNAV, the ratio of the company’s value compared to the value of its crypto holdings, to 0.79x.
Magazine: Solana vs Ethereum ETFs, Facebook’s influence on Bitwise — Hunter Horsley