Binance Weighs Opening $10bn Portfolio

Changpeng Zhao, the billionaire co-founder of Binance, is weighing the prospect of opening his $10bn personal investment arm to external investors. It would mark one of the most significant moves yet by a leading figure in the digital asset world to formalise a private fortune into an institutionally-facing fund.

Zhao, known widely as CZ, co-founded Binance in 2017 and built it into the largest cryptocurrency exchange by trading volumes. His wealth has been estimated by Forbes at more than $80bn, largely through his majority holding in the platform. Yet in 2023 his rise was checked when he pleaded guilty in the United States to a criminal charge of failing to protect against money laundering, a case that saw Binance itself pay $4.3bn in penalties. Zhao resigned as chief executive, served four months in prison, and is now seeking a presidential pardon from Donald Trump.

Despite the legal stain, Zhao remains the dominant shareholder in Binance and continues to promote its blockchain token, BNB. He has also shifted attention to his investment firm, YZi Labs, which until earlier this year traded under the name Binance Labs. The group manages Zhao’s fortune alongside capital from a handful of Binance’s earliest executives, including co-founder Yi He, who is also Zhao’s partner.

The rise of YZi Labs

Ella Zhang, head of YZi Labs and one of Zhao’s closest lieutenants, told the Financial Times that the company is open to the possibility of converting into a fund structure that admits outside investors. “There’s always a lot of external investors interested and we will eventually consider turning it into an external-facing fund,” Zhang said. “We just think it’s not there yet.”

The firm invests predominantly in digital assets but has also begun to commit capital to biotechnology and artificial intelligence. Around 70 per cent of its portfolio remains tied to cryptocurrencies and blockchain ventures. “In AI and biotech we’re still early,” Zhang said. “When we have that expertise, we have the confidence level, we’ll open up for external investors.”

YZi’s assets under management have been swollen by Zhao’s own stake. The challenge, Zhang admits, is to find enough quality opportunities to deploy such a vast pool. “CZ said to me ‘your challenge is to deploy.’ It’s just so hard to find so many good enough assets to meet our criteria.”

Early flirtation with external money

YZi Labs did accept outside commitments once before, raising about $300mn in 2022. Those funds were later returned, at least in part, on the grounds that the firm already had more than enough of its own capital to manage. Zhang declined to name the investors involved but admitted demand was heavy. “The reason we returned [the funds] is because the funds we were managing were massive. The demand is very high, a lot of external [investors] want to invest alongside us. But 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.”

The cautious tone reflects both the regulatory environment and the sheer size of Zhao’s portfolio. Accepting US investors, in particular, would invite close examination from the Securities and Exchange Commission and other agencies. That could complicate operations, given Zhao’s recent criminal conviction and the history of US sanctions breaches at Binance.

A shifting regulatory backdrop

Zhang nonetheless sees a friendlier climate under the Trump administration. The SEC, she said, even requested a private demonstration of some of the start-ups YZi Labs had backed, after its chair was unable to attend the firm’s recent demo day at the New York Stock Exchange. “Crypto entrepreneurs who fled the US under [former president] Joe Biden’s administration are returning to Silicon Valley because of the whole administration’s attitude [in] wanting to promote the US as a crypto capital,” she said.

That stands in contrast to the regulatory hostility of the past two years, when SEC lawsuits and banking restrictions drove many crypto firms overseas. Circle, the stablecoin issuer, only revived its long-delayed IPO this year after the political shift in Washington. Kraken, another major US exchange, is also preparing a listing. Klarna, though outside crypto, has been cited as another bellwether for investor appetite for fintech floats.

Deploying billions in digital assets

YZi’s dealmaking has already been conspicuous. It has backed a $1bn project with former executives of Chinese bitcoin miner Bitmain, and led a $500mn fundraising to convert a Nasdaq-listed vape manufacturer into a treasury vehicle for BNB tokens. Zhang said more than 50 teams pitched to them this summer with ideas for crypto treasury firms that raise money publicly and use it to buy tokens.

The strategy reflects a conviction that blockchain-based assets will underpin future corporate balance sheets. “CZ’s vision is that robotics will help human beings to do things and their transactions will be [done] through crypto wallets,” Zhang explained.

YZi’s team numbers only 12 but it takes what Zhang calls a “super long-term” approach. “We’re not like other VCs calculating multiples on an annual basis.” Investments in robotics, AI, and biotech are expected to play a larger role over time, broadening the portfolio and making it more digestible for institutions if it does transition to a fund.

The personal dimension

Zhao himself remains a polarising figure. To critics, he embodies the excesses of an industry that grew too fast and too freely, bypassing controls that traditional finance takes for granted. To supporters, he is a visionary who built a global exchange out of nowhere and still champions the ethos of decentralisation.

Opening his wealth to outside investors would be a way to formalise his legacy. It would also raise questions about whether regulators are willing to accept his return as a major financial actor. Trump’s friendlier stance has given Zhao a window of opportunity, but investors may still hesitate given his legal history.

What next

The possibility of YZi Labs becoming an external-facing fund is, for now, a plan rather than a certainty. Much depends on how quickly its team can build expertise in new sectors and whether regulatory conditions allow Zhao to re-emerge as a mainstream investor.

If it proceeds, it would signal that crypto’s early leaders are not only returning to the United States but also seeking to institutionalise their fortunes, bringing them under the same scrutiny and discipline as conventional private equity. For a man once at the centre of the industry’s biggest legal scandal, that would be a striking turn.