tl;dr
YZi Labs, led by Changpeng Zhao's former team, is considering opening to outside capital as regulators shift and the crypto landscape evolves. The fund's massive portfolio and potential regulatory changes could redefine crypto investing.
**YZi Labs Weighs Opening to External Investors as Crypto Fund Landscape Evolves**
Changpeng “CZ” Zhao’s $10 billion investment firm, YZi Labs, is considering a major shift: opening its doors to outside capital. The fund, which manages Zhao’s personal wealth and investments from early Binance insiders, has long operated with a tight-knit group of backers. But recent conversations hint at a potential pivot. “There’s always a lot of external investors interested,” Ella Zhang, who leads YZi Labs, told the *Financial Times*. “We will eventually consider turning it into an external-facing fund. We just think it’s not there yet.”
YZi Labs’ portfolio reads like a who’s who of the crypto and Web3 world. It has stakes in projects like Aptos Labs, Polygon, 1inch Network, and Sky Mavis, alongside infrastructure giants such as LayerZero and security firms like CertiK. With over 230 companies in its fold, the fund has become a linchpin in the industry. Yet, despite its scale, it has historically been cautious about external capital. In 2022, it accepted $300 million from outside investors but later returned part of the funds, citing the “overwhelming scale” of its existing assets.
The move comes as regulators take a closer look. The U.S. Securities and Exchange Commission (SEC) recently requested a private demo of YZi Labs’ portfolio, a gesture that some see as a sign of a more crypto-friendly approach under the Trump administration. “Paul Atkins and other commissioners, they are very open-minded,” Zhang said, referencing the SEC’s new chair, who took over in April 2025. The request followed a missed demo day at the New York Stock Exchange, sparking speculation about the agency’s evolving stance on digital assets.
Zhao’s own journey adds context to the story. He stepped down as Binance CEO last year after pleading guilty to U.S. criminal charges related to lax anti-money laundering (AML) controls. Though he served a four-month prison sentence and now seeks a pardon from President Donald Trump, Zhao remains Binance’s largest shareholder. His exit from the exchange has not dimmed his influence in the crypto space, with YZi Labs serving as a new arena for his vision.
YZi Labs’ potential expansion mirrors broader trends in the industry. In June, Galaxy Digital raised $175 million for its first externally backed venture fund, surpassing its $150 million target. Meanwhile, Bitcoin analyst Willy Woo recently sold most of his BTC, opting to invest in Bitcoin infrastructure startups. “Early-stage Bitcoin startups offer 100–1,000x potential returns,” he noted, underscoring the shift toward foundational technologies.
As YZi Labs weighs its next steps, the crypto world watches closely. Will the fund’s embrace of outside capital signal a new era of transparency and growth? Or will it face the same regulatory hurdles that have challenged the industry for years? The answer could shape the future of crypto investing—and the role of visionary firms like YZi Labs in it.
What do you think? Would you trust a fund led by a former Binance CEO with a legal past to manage your investments? Or do you believe the crypto space needs more regulatory clarity before such moves gain traction? Share your thoughts below.