Changpeng “CZ” Zhao’s investment arm, YZi Labs, is exploring plans to open its $10 billion fund to external investors, signaling a move to attract broader participation in the booming crypto ecosystem. Managed personally by Zhao and backed initially by early Binance insiders like co-founder Yi He, the fund has already accepted approximately $300 million from outside sources in 2022. However, it later returned some of this capital, citing the overwhelming scale of assets under management.
“There’s always significant interest from external investors,” Ella Zhang, head of YZi Labs, told the Financial Times. “We’re considering turning it into an external-facing fund in the future. But at this stage, we believe it’s not the right time yet.”
YZi Labs’ portfolio includes leading projects across the crypto and Web3 space, such as Aptos Labs, Polygon, 1inch Network, Sky Mavis, along with infrastructure and security players like LayerZero, Mysten Labs, and CertiK. The fund’s holdings encompass over 230 companies, according to Dealroom, highlighting its extensive reach within the blockchain industry.
Related: Standard Chartered venture arm plans $250M fund for digital assets
SEC Requests Confidential Demo of YZi Labs Portfolio Companies
Ella Zhang also revealed that the U.S. Securities and Exchange Commission (SEC) recently requested a private demonstration of companies backed by YZi Labs. The SEC’s inquiry followed its chair’s absence at the firm’s demo day at the New York Stock Exchange, signaling a comparatively more approachable stance from US regulators on crypto under the Biden administration.
“Commissioner Paul Atkins and others are quite open-minded,” Zhang noted. Atkins has served as SEC chair since April 2025. This development indicates a shift towards more constructive engagement between regulators and innovative blockchain firms.
Meanwhile, Zhao stepped down from Binance last year after pleading guilty to a US criminal charge related to AML compliance. He served a four-month prison sentence and is currently seeking a pardon from President Donald Trump. Despite this, Zhao remains Binance’s largest shareholder and continues to exert influence over the industry.
Crypto market participants are closely monitoring regulatory developments as the industry matures, with increasing interest from institutional investors in blockchain, DeFi, and NFT ventures. The move by YZi Labs to consider inviting external capital marks a notable evolution in the institutionalization of crypto funds.
Recent Trends in Crypto Venture Funding
This shift comes amid rising demand for crypto-native investment funds. Notably, Galaxy Digital raised $175 million for its first externally managed venture fund in June, surpassing its initial $150 million target. Such developments underscore growing confidence in the potential returns from early-stage blockchain startups, which some analysts believe could offer multi-fold gains over traditional assets.
As the crypto industry expands, regulatory clarity and institutional participation will continue to shape the future of blockchain innovation and investment.
