A new investor lawsuit against CEA Industries is intensifying an ongoing governance dispute between the Nasdaq-listed company and major shareholder YZi Labs, a crypto investment firm backed by Binance founder Changpeng Zhao.
In a statement on Wednesday, YZi Labs pointed to recent media reports describing a lawsuit filed by investor Abraham Gomez against CEA Industries and director Hans Thomas, who is also the founding partner of asset manager 10X Capital.
According to the reports cited by YZi, the complaint alleges that after investing in the company, the stockholder visited its offices and found what the lawsuit describes as an “operational vacuum.” The filing reportedly claims the company lacked key executive leadership, operational staff, and even a functioning website at the time of the visit.
YZi Labs said the allegations reinforce concerns it has raised for months about the company’s governance and relationship with 10X Capital, which manages CEA’s digital asset treasury under a long-term asset management agreement.
“When an investor visits a Nasdaq-listed enterprise and finds a ‘Potemkin village’ with no management, no operations, and not even a website, the illusion shatters,” YZi Labs investment partner Alex Odagiu said in the statement.
YZi called on the company’s board to publicly address the allegations, investigate Thomas, and terminate the asset management agreement with 10X.
The Block has reached out to CEA Industries for comment.
Escalating governance disputes
The latest development marks an escalation in a conflict that has been building for months.
Earlier this year, YZi criticized CEA Industries after the company adopted a shareholder rights plan, commonly known as a poison pill, following YZi’s efforts to expand its influence over the board. CEA Industries previously said the defensive measures were intended to protect stockholders from opportunistic takeover attempts.
Shares of CEA Industries (NASDAQ: BNC) were trading around $3.73 on Wednesday, near an all-time low and down sharply over the past year. The stock briefly surged above $80 last summer after the company pivoted away from its legacy vape manufacturing business toward a BNB-focused digital asset treasury strategy, backed by a $500 million private placement involving YZi Labs and 10X Capital.
© 2026 The Block. All Rights Reserved. This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.
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