Just a few months ago, CEA Industries was riding the crest of the digital asset treasury wave. The Canadian vape shop chain, formerly traded as VAPE, underwent a major transformation in direction during Summer 2025. The Company successfully transitioned from traditional vape shops to offering a whole new product line via its newly developed eCommerce platform, e-VAPE.
By rebranding to the BNB Network Company (Nasdaq: BNC), it aimed to become the world’s largest corporate holder of Binance Coin (BNB). The broader financial market initially loved the aggressive narrative. During the height of the crypto treasury mania last July, shares skyrocketed to a multi-year high of $82.88. Today, however, that optimism has completely evaporated.
The $500 Million Financing Play
To execute its ambitious treasury strategy, the company secured a massive $500 million Private Investment in Public Equity (PIPE) transaction. The deal brought in heavy hitters from both traditional finance and the decentralized sector. Cantor Fitzgerald, founded by current U.S. Commerce Secretary Howard Lutnick, acted as the sole placement agent and lead financial advisor. Meanwhile, 10X Capital Asset Management stepped in to direct the BNB accumulation strategy. The funding round attracted massive investments from prominent crypto venture funds, including Pantera Capital, GSR, Blockchain.com, and Arrington Capital. Unfortunately for these institutional backers, the highly anticipated investment has since turned disastrous.
Allegations of a “Secret Side Agreement”
With shares now trading at a dismal $3.88—representing a staggering 95% loss over seven months—the corporate blame game has officially begun. This week, CEA Industries issued a fiery press release targeting YZi Labs, the family office of Binance founder Changpeng Zhao. CEA’s management is alleging that 10X Capital and YZi Labs reached a secret agreement between themselves concerning both asset management fees and governance authority. CEA, which has been publicly demanding full disclosure from YZi about the confidentiality provisions of the alleged deal, claims the undisclosed terms are detrimental to the company’s financial stability and overall operational transparency.
A Broader Trend of Treasury Flops
The financial devastation of CEA Industries is not an isolated case in today’s market environment. The digital asset treasury model, which was created as a way to attempt to duplicate the aggressive accumulation strategy used by some of the original Bitcoin adopters, has encountered significant headwinds. Other companies advised by the same financial institutions are facing brutal business fates as well. 10X Capital advised Nakamoto, another crypto based business, has fallen in value by almost 99% since its all-time high of May 2025. 21 has fallen approximately 89%, and The Bitcoin Standard Treasury Company has fallen by around 37% in the same period. Each of these extremely high percentage declines in value demonstrate the extreme volatility and inherent risks of publicly traded proxy vehicles that invest in digital assets.
The Fight for Boardroom Control
The narrative coming from YZi Labs paints a drastically different picture of the ongoing crisis. The family office has forcefully contested the “secret” characterization of the agreement, stating that the provisions were fully disclosed in standard regulatory filings and legally terminated last December. Instead of accepting the blame, YZi Labs is pointing the finger squarely at CEA Industries’ current leadership.
The firm is actively soliciting stockholder consent to overhaul and restructure the board, arguing that the executives have utilized defensive “poison pill” tactics to entrench themselves. YZi Labs is specifically demanding that directors David Namdar and Hans Thomas recuse themselves from all future asset management discussions. As the governance war intensifies and public accusations fly, everyday retail and institutional investors are left holding the bag of a stock that has fundamentally collapsed. The outcome of this boardroom brawl will likely set a major precedent for how corporate crypto treasuries are governed moving forward.
