One of the World's Largest Crypto Funds May Finally Take External Money

YZi Labs, under the leadership of Binance co-founder Changpeng Zhao, is considering opening up to external investors. The firm manages a portfolio valued at $100 billion and has become one of the world's largest cryptocurrency investment institutions.

According to a report by the Financial Times on Tuesday, YZi Labs, which was spun off from Binance and began independent operations in January, currently primarily manages the capital of Zhao and a few early Binance executives.

Ella Zhang, head of YZi Labs, stated in an interview that the company ultimately plans to transform into a fund that accepts external investors. However, she noted that the firm is still in the early stages of building specialized teams for its new focus areas, such as artificial intelligence and biotechnology. Zhang revealed that YZi Labs accepted approximately $300 million in external investment in 2022 but later returned a portion of those funds. She emphasized that due to the firm's massive scale of managed assets and its ultra-long-term investment strategy, it is currently difficult to meet the return expectations of external investors in the short term. If YZi Labs decides to accept external investors in the future, it may face stricter scrutiny from regulators.

Regarding its investment portfolio, digital assets account for about 70% of YZi Labs' investments, but its interest in AI and robotics is growing. Zhang mentioned that Zhao's vision is that robotics technology will assist humans in handling various tasks, and these transactions will be conducted through crypto wallets. Zhang also highlighted the significant challenge of deploying such a large amount of capital, stating that the challenge is how to deploy the capital; it's extremely difficult to find enough high-quality assets that meet our criteria.

This 12-person team adopts an "ultra-long-term" investment approach. Zhang added, “We're not like other VCs [venture capital] calculating multiples on an annual basis.”

Recently, YZi Labs has focused on investing in several so-called crypto "treasury companies"—companies that raise public funds to purchase tokens. The firm is supporting a $10 billion deal involving Bitcoin mining machine manufacturers and led a $500 million funding round in July to transform a Nasdaq-listed e-cigarette manufacturer into a BNB treasury company. Zhang disclosed that during this summer's financing boom, YZi Labs received investment proposals from "over 50 teams" seeking to purchase tokens in large quantities. This trend reflects the rapidly growing demand from institutional investors for cryptocurrency allocation. The company maintains a cautiously optimistic attitude towards such investment opportunities, focusing on projects with long-term value rather than short-term speculative investments.