Family Office vs. Public Pressure: YZi Labs Weighs Investor Expansion

YZi Labs, the $10 billion investment vehicle founded by Binance co-founder Changpeng "CZ" Zhao, is exploring opportunities to open its portfolio to external investors and potentially transition into a publicly accessible fund. The firm, which rebranded from Binance Labs and now manages Zhao’s personal wealth along with capital from early Binance executives, has drawn significant interest from external parties despite maintaining a cautious approachBinance Founder 'CZ' Considers Opening YZi Labs to External Investors^[1]. Head of YZi Labs, Ella Zhang, confirmed in interviews that the firm is "eventually" considering the move, though it remains in the exploratory phase due to the complexity of balancing long-term strategies with external return expectationsYZi Labs May Open $10B Portfolio to External Investors^[2].

YZi Labs’ current portfolio is heavily weighted in crypto and Web3 projects, including Aptos Labs, Polygon, and LayerZero, alongside emerging sectors like artificial intelligence (AI) and biotech. The firm’s 12-member team has adopted a patient capital strategy, prioritizing quality investments over rapid returns. However, challenges emerged in 2022 when the firm accepted $300 million in external funding but later returned a portion of the capital, citing difficulties in aligning with external timelines for liquidityFormer Binance CEO CZ’s YZi Labs May Open to External Investors^[3]. This experience underscores the tension between family office structures—designed for single-family wealth management—and the operational demands of managing external capital.

Regulatory dynamics are shaping YZi Labs’ trajectory. The Securities and Exchange Commission (SEC) recently requested a private demonstration of the firm’s portfolio, a move interpreted as indicative of a more open-minded stance toward crypto under the Trump administration. SEC Chair Paul Atkins, who assumed office in April 2025, has been highlighted as a key figure in this regulatory shift. Zhang noted that the commission’s engagement reflects broader U.S. efforts to recalibrate oversight of digital assets, though YZi Labs remains cautious about public market expansionCZ’s $10B crypto fund YZi Labs ‘may’ open to external investors^[4].

Strategic investments are amplifying YZi Labs’ influence beyond traditional crypto. The firm has deepened its stake in Ethena Labs, a stablecoin protocol whose synthetic dollar (USDe) has grown to $13 billion in circulation. USDe’s delta-neutral model, which pairs staked Ethereum with short futures to hedge volatility, aligns with YZi’s focus on yield-generating infrastructure. This partnership is seen as a test of YZi’s ability to bridge Web3 and traditional finance, particularly as Ethena expands integrations with Binance and plans to launch USDtb, a stablecoin collateralized by regulated assetsBinance Co-founder CZ's YZi Labs Bolsters Investment In Ethena …^[5].

The potential transition to an external-facing fund faces structural hurdles. Family offices typically avoid external investors due to governance complexities, but YZi’s scale—70% of its assets in crypto—creates unique opportunities and risks. Competitors like Galaxy Digital have successfully raised $175 million for external crypto funds, signaling growing institutional appetite. However, YZi’s emphasis on AI and biotech, sectors still in early development, complicates its ability to deliver consistent returns. Zhang emphasized that the firm will only pivot to external fundraising once its expertise in these fields maturesYZi Labs’ Move to External Investors Amid Rising Institutional Demand^[6].

YZi Labs’ evolution reflects broader trends in crypto-native investing. As the sector matures, firms are increasingly seeking hybrid models that blend venture capital with public market strategies. CZ’s post-prison focus on YZi Labs—following a four-month sentence for AML failures at Binance—positions the firm as a key player in reshaping perceptions of crypto’s viability. With the SEC’s recent engagement and rising institutional participation, YZi’s potential public offering could signal a pivotal moment for crypto’s integration into mainstream finance.