YZi Labs Balances AI Expansion and Regulatory Hurdles in Push for Public Investment

YZi Labs, the $10 billion investment vehicle spun off from Binance in 2025, is evaluating the potential to open its fund to external investors, according to its managing director, Ella Zhang. In remarks to the Financial Times, Zhang acknowledged persistent interest from external capital but emphasized the firm is not yet prepared to transition to a publicly accessible fund. “We will eventually consider turning it into an external-facing fund. We just think it’s not there yet,” she stated, citing ongoing efforts to expand its artificial intelligence and biotechnology teamsBinance spinoff YZi Labs may open to external investors in future ...^[1]. The firm, which manages assets for Binance co-founder Changpeng “CZ” Zhao and early Binance insiders, has historically accepted limited external funding. In 2022, it raised $300 million in outside capital but later returned portions of the capital due to the overwhelming scale of its existing portfolioFormer Binance CEO CZ’s YZi Labs May Open to External Investors^[2].

YZi Labs’ current portfolio spans over 230 companies, including prominent crypto and Web3 projects such as Aptos Labs, Polygon, and Sky Mavis, as well as infrastructure and security firms like LayerZero and CertiKFormer Binance CEO CZ’s YZi Labs May Open to External Investors^[2]. The fund’s strategic focus aligns with CZ’s broader vision for YZi Labs, which was rebranded from Binance Labs in early 2025 to operate as a family office for Zhao and co-founder Yi He. The rebranding also marked a shift toward diversifying investments beyond blockchain into AI and biotechnology, reflecting CZ’s post-jail priorities of “impact-driven” projects.

Regulatory engagement has intensified for YZi Labs. The U.S. Securities and Exchange Commission (SEC), under Chair Paul Atkins, recently requested a private demo of the firm’s portfolio following its chair’s missed opportunity to observe a demo at the New York Stock ExchangeFormer Binance CEO CZ’s YZi Labs May Open to External Investors^[2]. Zhang described the SEC’s approach as “very open-minded,” suggesting a more crypto-friendly regulatory environment under the Trump administration. This aligns with broader industry trends, including the SEC’s recent interest in tokenization and stablecoin frameworks, as highlighted in a Trump-era regulatory analysis.

CZ’s personal circumstances remain intertwined with YZi Labs’ operations. The former Binance CEO, who served a four-month prison sentence in 2024 for violating anti-money laundering regulations, is seeking a presidential pardon from Donald TrumpFormer Binance CEO CZ’s YZi Labs May Open to External Investors^[2]. Despite stepping down from Binance’s leadership, he retains a controlling stake in the exchange. The fund’s potential expansion into external capital comes as institutional demand for crypto-native investments grows. For instance, Galaxy Digital raised $175 million for its first external venture fund in June 2025, exceeding its $150 million targetBinance Labs Rebrands to YZi Labs: A Bold Move by …^[6].

The move to open YZi Labs to external investors also reflects broader market dynamics. Bitcoin analyst Willy Woo has argued that infrastructure projects offer higher returns than direct BTC holdings, while firms like Nano Labs have begun stockpiling BNB as a treasury assetBinance Labs Rebrands to YZi Labs: A Bold Move by …^[6]. YZi Labs itself recently supported 10X Capital in launching a BNB-focused treasury company aimed at a U.S. public listing. These developments underscore a shift toward institutional-grade crypto assets and infrastructure, a space where YZi Labs has positioned itself as a key player.

YZi Labs’ potential transition to a publicly accessible fund, however, faces regulatory hurdles. Zhang noted that accepting U.S. investors could trigger stricter scrutiny, a challenge shared by other crypto-native funds navigating evolving regulatory frameworksYZi Labs may open up to external investors in the future.^[3]. The firm’s cautious approach contrasts with the aggressive fundraising seen in traditional venture capital but aligns with its long-term strategy of balancing high-growth investments with regulatory compliance.