CZ Denies YZi Labs Fundraising Amid Heightened Crypto Regulation Scrutiny

Binance founder Changpeng “CZ” Zhao has dismissed as false a Financial Times (FT) report alleging that his family office, YZi Labs, is preparing to raise capital from external investors. In a social media post, Zhao characterized the article as containing “made-up info and negative narratives,” emphasizing that YZi Labs has not engaged in any fundraising activities since its rebranding in January 2025. The FT had cited YZi Labs CEO Ella Zhang’s statements suggesting the firm could evolve into a fund for third-party investors once its internal operations matured. Zhao denied these claims, stating that the firm has not prepared a pitch deck, held a demo, or entered discussions with regulators or investors. He also clarified that YZi Labs operates independently from Binance and was not spun off from the exchange.

The FT’s report had further alleged that YZi Labs, valued at $10 billion, had attracted interest from external investors and had previously accepted $300 million in capital in 2022 before returning part of the funds. Zhao refuted these assertions, noting that no such external capital is being sought. He also criticized the FT for misrepresenting his legal history, particularly his U.S. plea deal related to anti-money laundering deficiencies at Binance. The founder emphasized that his compliance issues should not be conflated with allegations of money laundering, as the FT’s report had framed them.

YZi Labs, which manages Zhao’s personal wealth and investments from a small group of early Binance executives, has expanded its focus beyond cryptocurrency to include artificial intelligence and biotechnology. The firm currently employs a 12-person team and prioritizes long-term investments over short-term returns. Notable investments include Avalon Labs, a Bitcoin DeFi platform, and Ethena Labs, a stablecoin protocol. Zhao reiterated that YZi Labs remains a private entity and has no plans to open to outside capital, despite the broader crypto industry’s growing interest in institutional-grade investment vehicles.

The controversy has reignited scrutiny over CZ’s influence and the regulatory challenges facing crypto-native ventures. The FT’s report had suggested that the U.S. Securities and Exchange Commission (SEC) had shown interest in YZi Labs’ portfolio, even requesting a “private demo” of its startup holdings. However, both Zhao and Zhang denied these claims, stating that the firm’s recent demo event was public and not a private meeting with regulators. The dispute underscores the heightened regulatory attention on crypto projects, particularly those linked to high-profile figures with prior legal entanglements.

YZi Labs’ independence from Binance is a key point of differentiation in its strategy. While Zhao stepped down as Binance CEO in November 2023 as part of a $4.3 billion settlement with U.S. authorities, he remains the exchange’s largest shareholder. The family office’s focus on long-term, impact-driven investments contrasts with Binance’s operational history, which has faced repeated regulatory scrutiny. Zhao’s public denial of the fundraising claims aligns with his broader efforts to distance YZi Labs from Binance’s compliance legacy, even as the firm’s activities continue to draw attention from investors and regulators.

The controversy also highlights the broader challenges of transparency and trust in the crypto industry. CZ’s legal record and Binance’s regulatory battles have cast a long shadow over his new ventures, making it difficult to separate YZi Labs from its parent company’s history. Analysts note that institutional investors remain cautious about crypto-native funds, particularly those tied to individuals with regulatory infractions. While YZi Labs’ current portfolio and strategic direction suggest a focus on innovation, the firm’s ability to attract external capital in the future will depend on its ability to navigate regulatory expectations and rebuild trust with potential partners.

As the crypto market continues to evolve, the dispute between CZ and the FT serves as a case study in the challenges of balancing innovation with accountability. For now, YZi Labs remains a private entity, but its trajectory will likely be shaped by both its investment strategy and the broader regulatory environment. The outcome of this controversy could set a precedent for how crypto ventures manage public perception and regulatory engagement in an increasingly scrutinized industry.