Changpeng Zhao’s YZi Labs Mulls Opening to Outside Capital

TL: DR Breakdown

• Yzi Labs explores external funding in crypto, AI, and biotech.
• Ella Zhang previously suggested that the firm may have to explore external investments once sufficient experience is gained. 
• The firm previously took in $300 million in external funding but later returned part of it. 

Ella Zhang, head of YZi Labs, recently spoke with Financial Times regarding the firm’s future plans and investment strategy. YZi Labs is an investment firm founded by former Binance CEO Changpeng Zhao that operates independently of Binance. The firm boasts a portfolio worth over $10 billion, mostly consisting of Zhao’s personal funds and capital from early Binance executives, including co-founder Yi He. 

Yzi Labs weighs external investments. 

Speaking with the Financial Times, Ella Zhang stated that numerous external investors have shown an interest in YZi Labs; however, she believes that while the firm would eventually need to look at external funding, the firm is not there yet. While the firm has a lot of experience in the crypto ecosystem, in AI and in biotech, the firm’s experience and confidence are not sufficient to open up for external investment. 

Currently, YZi manages the funds of Binance co-founder Changpeng Zhao and his close associates. Ella believes that opening up to external funding from US investors would bring in unnecessary regulatory scrutiny.

Zhao revealed that the administration’s pro-crypto stance is evident as the SEC sought a “private demo showcase” of some of the companies that YZi Labs had invested in, as the SEC chair missed the firm’s demo day at the New York Stock Exchange. 

Zhao’s departure from Binance

Changpeng Zhao pleaded guilty to a US criminal charge of failure to protect against money laundering. Zhao resigned as Binance’s CEO and spent four months in jail while Binance had to pay billions of dollars in penalties. Now he is barred from being involved in the exchange’s management, but still remains its largest stakeholder as he seeks a pardon from President Trump. 

Administration’s shift in attitude on crypto

Zhang believes that a lot of entrepreneurs who left the US are now returning under President Trump due to the administration’s attitude in promoting crypto adoption. Zhang added that the current $10 billion was difficult to invest in crypto. This was also a major reason in YZi Labs’ decision to return part of the $300 million investment in 2022. 

While she believes a lot of investors seek to join YZi Labs, the firm is not “in a rush” to exit from most companies it has invested in, making it difficult to deliver on what external investors expect.