YZi Labs Seeks U.S. Capital as SEC Eases Crypto Stance Post-Punishments

YZi Labs, the investment vehicle of Binance founder Changpeng Zhao, is considering opening its $10 billion portfolio to external investors amid growing interest in cryptocurrency and evolving regulatory dynamics in the United States title1^[1]. The firm, spun off from Binance in January 2025, currently manages Zhao’s personal wealth and capital from early Binance executives, including co-founder Yi He. While it previously accepted $300 million in external funding in 2022, it later returned part of that capital due to the scale of its existing assets. Chief Executive Ella Zhang confirmed to the Financial Times that the firm is evaluating a transition to an external-facing fund but emphasized the need for internal capabilities to mature first title2^[2].

YZi Labs’ portfolio spans crypto startups, biotechnology, and artificial intelligence, with over 230 companies under management. Notable investments include Aptos Labs, Polygon, 1inch Network, and infrastructure firms like LayerZero and CertiK. Approximately 70% of its assets remain allocated to digital assets, though interest in AI and robotics is rising. The firm has also pursued unconventional strategies, such as leveraging public companies to raise capital for token purchases, including a $1 billion deal with former Bitmain executives and a conversion of a Nasdaq-listed vape firm into a BNB-focused treasury vehicle title3^[3].

Regulatory considerations loom large if YZi Labs expands to U.S. investors. The firm would face stricter compliance requirements, particularly given Zhao’s guilty plea in 2023 for anti-money laundering violations related to Binance. The exchange subsequently paid over $4.3 billion in penalties to U.S. authorities. Despite these challenges, Zhang noted that U.S. regulators, including the Securities and Exchange Commission (SEC), have shown renewed openness to crypto innovation. The SEC recently requested a private showcase of YZi-backed projects after its chair missed a public demo day, signaling a potential shift in regulatory tone under the Trump administration title1^[1].

Zhao’s post-Binance trajectory has been marked by legal and strategic recalibration. After serving a four-month prison sentence in 2023, he has sought a presidential pardon and focused on YZi Labs as a vehicle for long-term capital deployment. The firm’s approach prioritizes a “super long-term” horizon, avoiding annual performance targets. This aligns with Zhao’s broader vision of deploying capital while maintaining high-quality investments, though scaling such a strategy across crypto, AI, and robotics remains a complex undertaking title3^[3].

The potential opening of YZi Labs to external capital coincides with broader trends in crypto-native investment. Galaxy Digital, for instance, raised $175 million for its first external venture fund in June 2025, exceeding its $150 million target. Analysts like Willy Woo have highlighted the appeal of Bitcoin infrastructure startups, which he claims offer 100–1,000x returns compared to holding BTC directly. These developments underscore growing demand for diversified crypto exposure, particularly as institutional investors seek regulated avenues to participate in the sector title2^[2].

YZi Labs’ strategic pivot reflects both market opportunities and regulatory pragmatism. While the firm remains cautious about U.S. expansion, its engagement with regulators and focus on cross-sector innovation position it to capitalize on the maturing crypto ecosystem. The firm’s ability to balance long-term horizons with regulatory compliance will be critical as it navigates the transition from a private wealth vehicle to a broader investment platform.