YZi Labs, the venture capital firm formerly known as Binance Labs, is considering opening up its $10 billion portfolio to outside investors and converting into an investment fund, the Financial Times reported on Tuesday.
YZi Labs, spun out of Binance in January, ranks among the world's largest crypto investors, managing the fortune of Binance co-founder Changpeng "CZ" Zhao along with capital from a handful of early executives, including co-founder Yi He, Zhao's longtime partner.
"There's always a lot of external investors interested and we will eventually consider turning it into an external-facing fund," Head of YZi Labs Ella Zhang told the outlet.
Beyond crypto start-ups, YZi Labs also invests in biotech and AI, but Zhang said the firm wasn't quite ready for external investors yet. "In AI and biotech we're still early, we're forming our team. When we have that expertise, we have the confidence level, we'll open up for external investors," Zhang said, adding that it would be a "huge responsibility."
If YZi Labs were to accept U.S. investors, it could face far greater regulatory scrutiny. Zhao, who co-founded Binance in 2017 and built it into the world's largest crypto exchange, amassed a fortune of more than $80 billion through his majority stake, according to Forbes.
However, his success has been shadowed by legal troubles. The former Binance CEO served a four-month sentence in 2024, having pleaded guilty in 2023 to charges related to violating anti-money laundering laws and other compliance failures. Binance also admitted to charges tied to money laundering and sanctions breaches, paying more than $4.3 billion in penalties. Zhao is no longer formally involved with Binance, having been prohibited from participating in its management.
Zhao is reportedly seeking a pardon from President Trump, amid the more friendly regulatory tone toward crypto under his administration. Zhang said that crypto founders who once left the U.S. under Joe Biden's administration are now returning to Silicon Valley, encouraged by SEC Chair Paul Atkins and other commissioners, who she described as "very open-minded."
Binance Labs, as it was then known, previously accepted its first external capital when it closed a $500 million fund in 2022. However, it later started sending undeployed capital back to Limited Partners. DST Global Partners and Breyer Capital were named as investors, along with other unnamed institutions; however, Binance itself contributed the bulk of the $500 million. "The reason we returned is because the funds we were managing already were massive," Zhang explained. "The demand is very high, a lot of external [investors] want to invest alongside us. For the majority of the projects we invest in, we're not in a rush . . . to exit . . . it's hard to deliver what they expect," she added.
Zhang said the 12-person team follows a "super long-term" approach, noting, "We're not like other VCs that calculate multiples on a yearly basis.”
Recent YZi Labs investments include additional funding for Ethena Labs as well as BNB-focused crypto treasury firms B Strategy and CEA Industries. It has also invested in other crypto projects, including Aptos Labs, Polygon, 1inch, Mysten Labs, and LayerZero.
The Block reached out to YZi Labs for comment.
