YZi Labs' $10B Fund Expansion and Regulatory Implications: Navigating Institutional Crypto Infrastructure in a Fragmented Landscape

YZi Labs, the $10 billion family office of Binance co-founders Changpeng Zhao and Yi He, has emerged as a pivotal player in the institutionalization of crypto-native assets. Its recent expansion into BNB Chain treasuries, yield-bearing stablecoins, and cross-border infrastructure projects underscores a strategic pivot toward institutional-grade crypto infrastructure. However, this growth is occurring against a backdrop of divergent regulatory frameworks in the U.S. and EU, where compliance demands are reshaping the landscape for stablecoins and digital asset ecosystems.

Strategic Expansion: BNB Treasuries and Yield-Bearing Stablecoins

YZi Labs has prioritized the institutionalization of BNB, the native token of the Binance ecosystem, through partnerships with firms like 10X Capital and B Strategy. In July 2025, it supported the creation of a U.S.-listed BNB treasury company via 10X Capital, aiming to bring the token into traditional capital markets Binance founders’ US$10b fund backs US crypto listing bid^[1]. This initiative mirrors a broader trend: B Strategy's $1 billion BNB treasury, launched in August 2025, and Nano Labs' $500 million funding for a similar venture YZi Labs-Supported B Strategy to Launch $1B BNB Treasury^[2]. These efforts reflect YZi's bet on BNB as a reserve asset, leveraging its liquidity and utility within the BNB Chain ecosystem.

Simultaneously, YZi has deepened its stake in Ethena, the protocol behind the synthetic stablecoin USDe, which now boasts a total value locked (TVL) of $13 billion Former Binance Labs YZi Increases Ethena Stake as USDe Reaches $13B TVL^[3]. Ethena's recent development of USDtb—a fiat-backed stablecoin designed to comply with the U.S. GENIUS Act—highlights YZi's alignment with regulatory expectations while maintaining its focus on yield generation Crypto rule comparison: the US GENIUS Act versus EU's MiCA^[4]. This dual approach—supporting both algorithmic and fiat-backed stablecoins—positions YZi to navigate regulatory uncertainties while catering to institutional demand for diversified crypto-native assets.

Regulatory Divergence: GENIUS Act vs. MiCA

The U.S. and EU regulatory environments present starkly different challenges for YZi's initiatives. The GENIUS Act, enacted in July 2025, mandates that stablecoins be fully backed by U.S. dollars or short-term Treasuries, prohibits interest-bearing tokens, and enforces monthly reserve disclosures The GENIUS Act: A Comprehensive Guide to US Stablecoin Regulation^[5]. YZi's support for USDtb directly addresses these requirements, ensuring compliance with the Act's stringent reserve and transparency rules. This alignment is critical for accessing U.S. institutional markets, where the GENIUS Act has spurred demand for regulated stablecoin vehicles.

In contrast, the EU's Markets in Crypto-Assets (MiCA) framework, which took full effect in June 2023, imposes broader licensing and governance requirements on crypto-asset service providers (CASPs) Crypto Regulations in the EU 2025 | The Sumsuber^[6]. Ethena's recent exit from Germany—forced by BaFin's scrutiny of its synthetic dollar structure—exposes the friction between MiCA's emphasis on monetary sovereignty and YZi's crypto-native innovation Former Binance Labs YZi Increases Ethena Stake as...^[7]. While MiCA allows for a “passporting” system to streamline cross-border operations, its strict reserve and redemption rules have pushed projects like Ethena to relocate operations to crypto-friendly jurisdictions such as the British Virgin Islands MiCA vs. GENIUS Act (2025)^[8].

Compliance as a Strategic Lever

YZi Labs' approach to regulatory compliance is not merely reactive but strategic. By investing in Ethena's USDtb, it preemptively aligns with the GENIUS Act's requirements, securing a foothold in U.S. institutional markets. Meanwhile, its continued support for USDe—despite European challenges—demonstrates a calculated risk: maintaining exposure to yield-bearing stablecoins while adapting to MiCA's transitional periods. This duality reflects a broader industry trend: firms like YZi are leveraging regulatory divergence to optimize their global footprint, prioritizing markets where compliance can be harmonized with innovation.

The firm's expansion into biotech and AI further illustrates this strategy. By rebranding from Binance Labs and diversifying beyond Web3, YZi is positioning itself as a multi-sector venture capital firm capable of navigating both crypto-specific and traditional regulatory environments CZ’s $10B crypto fund YZi Labs ‘may’ open to external investors^[9]. This diversification may mitigate risks associated with crypto regulatory volatility while opening new avenues for institutional capital deployment.

Implications for the Crypto Ecosystem

YZi's initiatives highlight a critical inflection point in the institutionalization of crypto assets. The firm's ability to navigate the GENIUS Act and MiCA frameworks while scaling BNB treasuries and stablecoin infrastructure signals a maturing market where compliance and innovation are increasingly intertwined. However, the regulatory fragmentation between the U.S. and EU remains a barrier to seamless cross-border operations. For projects like Ethena, this necessitates a dual compliance strategy: adhering to U.S. standards for institutional access while adapting to EU rules for broader European adoption.

Conclusion

YZi Labs' $10 billion fund expansion represents a bold bet on the future of institutional crypto infrastructure. By aligning with the GENIUS Act's stablecoin framework and adapting to MiCA's challenges, the firm is navigating a complex regulatory landscape while advancing its vision of a diversified, crypto-native financial ecosystem. As the U.S. and EU continue to shape their regulatory approaches, YZi's ability to balance compliance with innovation will be a key determinant of its success—and a bellwether for the broader industry's evolution.