Strategy, Portfolio and Rebrand
YZi Labs, the investment vehicle managing the personal fortune of Binance co-founder Changpeng “CZ” Zhao, is actively considering a significant shift: opening its nearly $10 billion portfolio to external investors. This potential move, which would transform the firm from a family office into an external-facing fund, is being closely watched by large asset managers and crypto treasuries due to the scale of its holdings and the current U.S. regulatory climate.
The firm, which rebranded from Binance Labs in early 2025, operates with a 12-person team and manages a diverse portfolio of over 230 companies. While approximately 70% of its investments are in digital assets, YZi Labs is strategically expanding into artificial intelligence (AI) and biotechnology, reflecting CZ’s vision of a future where robotics and crypto wallets intersect. A recent notable action was increasing its stake in Ethena Labs, the issuer of the synthetic stablecoin USDe, which has seen rapid growth with a circulating supply surpassing $13 billion. The portfolio also includes major projects like Aptos Labs, Polygon, and LayerZero.
Opening the Door to Outside Money
Accepting external capital would have substantial implications for the firm’s market influence, regulatory scrutiny, and internal governance.
Ella Zhang, the head of YZi Labs, has confirmed strong external investor interest but emphasizes that the transition is not imminent. She stated that the team is first focused on building expertise in its new target sectors, AI and biotech, before taking on the “huge responsibility” of managing outside money. This cautious approach is informed by a previous experience in 2022 when the firm accepted and later returned part of $300 million in external funding due to a mismatch in investment horizons.
From a regulatory perspective, this move would inevitably attract greater scrutiny from U.S. authorities. There are already signs of engagement, as the Securities and Exchange Commission (SEC) recently requested a private demo of YZi Labs’ portfolio companies, which the firm interprets as a sign of a more open regulatory stance. Bringing in external investors would intensify this regulatory focus, likely necessitating tighter governance, clearer reporting, and more structured liquidity terms for investors.
For the market, an influx of external capital could increase buying pressure on tokens within YZi’s portfolio and boost open interest in related derivatives. However, it could also lead to a shift in the fund’s asset mix as it accommodates the risk-return profiles of a broader investor base.
Next Steps and Implications
For now, the move to external capital remains in the exploratory phase. The immediate next steps for YZi Labs involve finalizing internal governance rules and liquidity terms that would define the structure of any future fund. The timeline for any transition is contingent on both internal readiness and the evolution of the U.S. policy landscape.
In practical terms, a decision to open to outside money would fundamentally reshape YZi Labs’ strategy, subject it to tighter oversight, and potentially reprice exposure across the wide range of tokens and projects it supports. Market participants should monitor the growth of key holdings like USDe and further signals from regulatory bodies like the SEC for clues on the timing and nature of this potential shift.
