Changpeng “CZ” Zhao, founder of Binance and head of YZi Labs, has rejected claims made by the Financial Times that his $10B investment firm plans to open to external capital. The FT report suggested that YZi Labs manages CZ personal fortune and investments from early Binance insiders.
It also mentioned that the firm might consider allowing external investors into the fund. Zhao quickly dismissed the article as “completely false news.”
Zhao Denies Claims of YZi Labs Opening to External Investors
In a X post on Tuesday, Zhao stated that YZi Labs has not sought external investors, nor has it prepared a pitch deck or held demos with regulators. He strongly denied the FT’s claims that YZi Labs was planning to open the fund to outside capital.
Also Read: CZ Fights Back: Binance Founder Seeks Dismissal of $1.76B FTX Lawsuit
Zhao’s response comes after the FT article suggested that the firm had accepted $300 million in outside funding in 2022, later returning part of it due to the overwhelming size of capital already under management.
The Fund’s Portfolio and Strategic Plans
YZi Labs has built an extensive portfolio, which includes major crypto and Web3 projects. These projects include Aptos Labs, Polygon, 1inch Network, Sky Mavis, and infrastructure firms like LayerZero, Mysten Labs, and CertiK.
The firm manages investments in over 230 companies. This broad range of investments has helped solidify YZi Labs’ role as a key player in the cryptocurrency space.
Despite the claims of external investor interest, Ella Zhang, the head of YZi Labs, explained that while there is significant demand for outside investment, the firm is not ready to open up.
She stated, “We will eventually consider turning it into an external-facing fund, but it’s just not there yet.” This cautious approach suggests that YZi Labs is still focused on internal growth and maintaining its strategic autonomy.
SEC’s Interest in YZi Labs Investment
In the FT’s report, it was noted that the SEC had shown interest in the fund. According to the FT, the SEC recently requested a private demo of companies backed by the platform after missing the fund’s demo day at the New York Stock Exchange.
This request is seen as a sign that U.S. regulators may be becoming more open to crypto-related investments, particularly under the leadership of SEC Chair Paul Atkins.
Zhang commented on the SEC’s interest, praising the commissioners for being “open-minded.” She noted that this signals a shift toward a more crypto-friendly regulatory stance, which could help further legitimize crypto investments in the eyes of mainstream investors and regulators.
Growing Demand for Crypto-Native Funds
The platform is not alone in attracting interest from investors looking to capitalize on the growing cryptocurrency market. Other crypto-native investment funds are seeing similar trends.
For example, Galaxy Digital raised $175 million for its first externally-backed venture fund in June, surpassing its $150 million target. The growing interest in crypto investments has led many to seek opportunities in early-stage blockchain projects.
In July, Bitcoin analyst Willy Woo revealed that he had sold most of his Bitcoin holdings. Woo cited the potential for even greater returns from investing in Bitcoin infrastructure startups, which he believes offer 100 to 1,000 times potential returns compared to holding Bitcoin itself.
YZi Labs’ Strategic Investment Approach
The platform continues to prioritize internal growth rather than rushing into external investment. The firm’s strategy centers on carefully managing its existing capital and making selective investments in the most promising crypto and Web3 projects.
Zhao’s past legal issues, including his resignation from Binance after pleading guilty to charges related to AML controls, have not slowed the firm’s success. Despite stepping down, Zhao remains the largest shareholder in Binance and continues to guide the direction of the platform
Conclusion
YZi Labs has firmly denied any intentions to open up its fund to external investors, despite reports suggesting otherwise. The firm remains focused on managing its portfolio internally, though SEC interest suggests it may eventually engage with external investors.
As the demand for crypto-native investment funds continues to grow, YZi Labs is well-positioned to navigate future opportunities. Its strategic investments and capital management ensure the firm remains a key player in the crypto space, whether or not it opens to external capital.
Also Read: Inside CZ’s $76 Billion BNB Empire: What’s Behind the Explosive Price Climb?
Summary
YZi Labs, led by Changpeng Zhao, has denied claims that it plans to open its $10 billion fund to external investors. Despite reports from the Financial Times, Zhao stated the firm has not sought outside capital.
YZi Labs, known for its extensive portfolio in crypto and Web3 projects, remains focused on internal growth. With growing SEC interest and demand for crypto funds, the platform is well-positioned for future opportunities, even without opening to external investors.
Appendix: Glossary of Key Terms
External Investors: Individuals/ entities that invest money into a company, a fund, or an investment project from outside the invested company.
Web3: Another phase of the internet that’s developed around blockchain, peer-to-peer networks and tokens.
SEC : U.S. government agency that oversees financial markets, including crypto investments.
Demo Day: An Event where companies present their business model or technology to investors or potential stakeholders.
Crypto-native Funds: Investment funds targeting cryptocurrency and blockchain-related projects, as opposed to traditional assets.
AML: Regulations designed to prevent criminal practices such as money laundering and fraud.
Pitch Deck: A short presentation that is given by an entrepreneur or a firm to investors with intent to give them necessary details of the business or project.
Frequently Asked Questions About YZi Labs
1- What is YZi Labs’ stance on external investors?
YZi Labs has denied any plans to open the fund to external investors, calling recent claims “completely false news.”
2- What is in YZi Labs’ portfolio?
YZi Labs manages over 230 investments, including projects like Aptos Labs, Polygon, 1inch Network, and LayerZero.
3- Why is the SEC interested in YZi Labs?
The SEC recently requested a private demo of YZi Labs’ portfolio companies, signaling increased interest in crypto investments.
4- How does YZi Labs manage its growth?
The platform remains focused on internal growth and selective investments, prioritizing capital management and strategic autonomy.
