Binance co-founder Changpeng “CZ” Zhao is pushing back against reports that YZi Labs is considering opening up to outside investors.
“YZiLabs is not raising [an] external fund,” Zhao wrote in a post to X on Tuesday, adding that “YZiLabs, since rebranding, has not sought a single external investor. No requests, no discussions.”
Earlier today, the Financial Times, citing Head of YZi Labs Ella Zhang, published an article claiming the venture capital firm formerly known as Binance Labs may convert into a $10 billion externally-facing investment fund.
“There’s always a lot of external investors interested, and we will eventually consider turning it into an external-facing fund,” Zhang allegedly told the outlet. She reportedly noted that this may be a ways off, with YZi still building expertise in AI and biotech sectors.
“When we have that expertise, we have the confidence level, we’ll open up for external investors,” Zhang is reported to have said.
In addition to refuting Zhang’s alleged remarks, Zhao noted YZiLabs was not “spun out” of Binance, noting that the firm “operates independently.” Zhang previously said Binance Labs had for years “operated independently [of the exchange] while leveraging on the Binance brand.”
Zhang and Zhao co-founded Binance Labs in 2018.
YZi rebrand
YZi Labs, a play on its co-founders’ names, was rebranded in January, shortly after Zhao was released from prison. He served a four-month sentence after pleading guilty to a single violation of the Bank Secrecy Act for failing to maintain an adequate anti-money laundering program, he noted on Tuesday.
“Failure to police is not the same as stealing. Two very different things that the traditional media keeps on intentionally mixing up,” Zhao said.
This does not appear to be the first time Zhang’s statements to the press have been seemingly misconstrued. Bloomberg, which broke the news that Zhao would take “an active role“ in YZi Labs following its rebranding, quoted Zhang saying YZi would operate “purely a family office investment vehicle,” a claim the firm now denies.
A YZi spokesperson recently told The Block that “we don’t identify ourselves as [a] family office.”
‘Not in a rush’
Zhao claims the FT had asked him for an interview, allegedly promising “positive coverage.” However, there was a scheduling conflict and Zhang “had lunch with them first.”
Notably, in 2022, Binance Labs raised a $500 million fund with support from external investors, including DST Global Partners, Breyer Capital, and other unnamed institutions. However, Zhang told the FT the firm returned its undeployed capital, the majority of which was contributed by Binance itself.
YZi is among the most influential VC firms in crypto, having invested in 1inch, Aptos Labs, CertiK, Dune Analytics, LayerZero, Mysten Labs, and Polygon, among other high-profile projects.
“The demand is very high, a lot of external [investors] want to invest alongside us,” Zhang reportedly told the FT, adding that YZi takes a “super long-term” approach towards venture funding. “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.”
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