Changpeng Zhao is weighing a future opening of his $10b investment vehicle to outside capital at a later stage, as YZi Labs, the firm spun out of Binance in January, gauges timing and builds out new teams.
YZi Labs manages Zhao’s wealth along with funds from a small circle of early Binance executives, including co-founder Yi He.
The firm invests primarily in crypto start-ups, while also backing biotech and AI, and previously accepted about $300m from external investors in 2022 before returning part of that money.
Chief executive Ella Zhang told the Financial Times that there is steady interest from outside backers and that the firm may convert into an external fund when internal capabilities mature.
She described opening the doors to outside money as a “huge responsibility,” and said the near-term focus is hiring and deepening expertise in AI and biotech.
Zhang added that the 12-person team takes a “super long-term” view and is not driven by annual multiple targets, reflecting the scale and horizon of Zhao’s capital.
CZ’s Binance Roots Loom Large As YZi Weighs Potential US Capital
If YZi Labs eventually admits US investors, the firm would face stricter regulatory scrutiny. That consideration sits alongside a shifting policy landscape, with industry figures pointing to a more accommodative stance toward digital assets in Washington.
Zhao, widely known as CZ, co-founded Binance in 2017 and built it into the world’s largest crypto exchange. His majority stake has made him one of the sector’s wealthiest founders, according to public rich lists.
The path has not been smooth. In 2023, Zhao pleaded guilty to a US criminal charge related to anti-money laundering controls. Binance entered guilty pleas on money-laundering and sanctions violations and agreed to pay more than $4.3b in penalties.
US authorities said the exchange failed to report a large volume of suspicious transactions tied to serious crimes and terrorist groups.
SEC Seeks Private Showcase As Founders Drift Back To Silicon Valley
Zhao resigned from Binance and served a four-month jail term in 2023. Since completing his sentence, he has sought a presidential pardon in the US.
Against that backdrop, Zhang said US regulators have shown fresh interest in portfolio companies. She noted that the SEC requested a private showcase for YZi-backed projects after its chair could not attend a recent demo day at the New York Stock Exchange.
Founders who left the US in recent years are returning to Silicon Valley, Zhang said, pointing to an administration that wants to promote the country as a crypto hub. She added that some commissioners appear “open minded” to innovation.
Zhao Backs Treasury Structures Using Public Companies For Token Buys
Deploying such a large pool of capital is hard. Even so, Zhao has set a clear challenge, put money to work while keeping quality high. As a result, meeting YZi Labs’ criteria across crypto, AI and robotics will take time.
Meanwhile, the firm has leaned into crypto treasury structures. It is backing deals that use public companies to raise cash for token purchases. For example, it is pursuing a planned $1b transaction with former Bitmain executives. In July, it also led a raise to convert a Nasdaq-listed vape maker into a BNB-focused treasury vehicle.
Finally, digital assets make up about 70% of YZi’s portfolio. However, interest in AI and robotics is rising.
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