CZ's YZi Defense Highlights Crypto's Regulatory Challenges

CZ, the founder of Binance, has vehemently denied reports by the Financial Times (FT) suggesting that his family office, YZi Labs, is preparing to raise external capital. In a public post on X, CZ called the article “completely false” and accused the outlet of disseminating “made-up info and negative narratives.” The FT had cited comments from YZi Labs’ chief executive, Ella Zhang, indicating the firm might evolve into a $10 billion externally managed fund once it matures its capabilities in sectors like artificial intelligence and biotech. CZ refuted these claims, stating that YZi Labs has never prepared a pitch deck, held a demo, or engaged in fundraising discussions since its rebranding earlier this year. He emphasized that the firm operates independently and is not a spin-off of Binance CZ Slams FT Over YZi Labs Funding Rumors: “Completely False”^[1].

The controversy stems from Zhang’s remarks to the FT, where she acknowledged steady interest from external investors but stressed that YZi Labs is not yet prepared to accept outside capital. CZ disputed the characterization of the firm’s relationship with Binance, insisting it has no operational ties to the exchange. He also clarified that his legal settlement with U.S. authorities—related to a Bank Secrecy Act violation—should not be conflated with money laundering allegations, as the FT had framed it. CZ further criticized the outlet for what he described as a “trap,” noting he declined an interview invitation extended to Zhang CZ Denies Report Of YZi Labs Raising External Fund^[2].

YZi Labs, established in January 2025, currently manages CZ’s personal wealth and funds from a small circle of early Binance executives. The firm has historically invested in cryptocurrency startups but has expanded into biotechnology and AI. In 2022, it briefly accepted $300 million in external capital before returning part of the funds. CZ reiterated that no such fundraising is underway and that the firm’s 12-person team prioritizes long-term investments over short-term returns. YZi Labs has backed projects such as Avalon Labs, a Bitcoin DeFi platform, and Ethena Labs, the protocol behind the stablecoin USDe, which now has $13 billion in total value locked Binance founder CZ refutes FT’s claims of fundraising for $10B YZi Labs as ‘fake’^[3].

The potential shift to an externally managed fund would face heightened regulatory scrutiny, particularly in the U.S., where policymakers have signaled a more accommodative stance toward digital assets. Zhang noted in the FT interview that SEC Chair Paul Atkins had requested a private demo of YZi Labs’ portfolio, though CZ denied any direct communication with regulators. He emphasized that the firm’s focus remains on incubating Web3 projects while expanding into new sectors aligned with societal and environmental impact Binance founder CZ pleads guilty to money laundering violations^[4].

CZ’s denial underscores the broader challenges of navigating regulatory expectations in the crypto industry. While YZi Labs has positioned itself as an independent entity, its ties to Binance and CZ’s legal history continue to draw scrutiny. The firm’s long-term strategy, however, appears centered on maintaining its current structure while supporting high-impact technologies. As CZ stated, “I’m a long-term investor who cares about impact, not returns,” highlighting a vision that prioritizes innovation over immediate financial gains YZi Labs is Not Open for External Investors: Binance’s CZ Says^[5].