CZ refutes FT over YZi Labs funding claims: “completely false”

CZ refutes FT over YZi Labs funding claims: Changpeng “CZ” Zhao, the founder of Binance, publicly denied that his family office YZi Labs is looking for outside funding. He called a Financial Times report “completely false” and said there were no pitch decks, demos, or talks about raising money. He also made it clear that YZi Labs is a private family office managing his capital, not a fund raising limited partners, and pushed back against the article’s description of his U.S. legal case and any connection to a Binance “spinoff.”

Binance’s creator, Changpeng “CZ” Zhao, has disputed claims that his family office, YZi Labs, is planning to seek outside financing.

On Monday, Zhao released a reply on X, calling a Financial Times piece on the subject “completely false” and full of “made-up information and negative narratives.”

According to the FT story, YZi Labs, which was founded in January to handle Zhao’s personal fortune, is contemplating opening its $10 billion investment vehicle to external investors in the future.

Zhao’s pushed back on the mandate and independence of YZi Labs, saying the firm is a family office managing his personal capital not an investment fund raising limited partners; and no pitch decks or regulator “demos” and no plans to raise external money, pushing back on the idea that future conditional openness means current fundraising.

The publication quoted YZi Labs CEO Ella Zhang as saying the company may become an external fund once its internal skills had grown.

Zhang was cited as stating there was consistent interest from foreign investors and that raising more funds would be a “huge responsibility.”

YZi Labs operates independently and has not sought external capital, says Zhao.

In response, Zhao said that since its rebranding earlier this year, YZi Labs has never created a pitch deck, had a demo, or participated in fundraising negotiations.

He further denied that the firm was spun off of Binance, stating that it functions autonomously. “As far as I know: YZiLabs is not raising external fund,” Zhao had written. “There has been no demo, no requests, no discussions.”

Zhao also disputed the FT’s description of his US court settlement, in which he pleaded guilty to breaking the Bank Secrecy Act. He said that the issue addressed failing to maintain a sufficient anti-money laundering program and should not be confused with “money laundering violations,” as the report had worded it.

YZi Labs presently administers Zhao’s money, as well as cash from a limited group of early Binance officials, including co-founder Yi He. The business mostly invests in bitcoin startups, although it has also supported initiatives in artificial intelligence and biotechnology.

In 2022, it temporarily took around $300 million from foreign investors before returning a portion of that amount.

According to the FT story, if YZi Labs finally admits US investors, the company will face more regulatory monitoring, especially if politicians in Washington telegraph a more liberal attitude to digital assets.

Zhao, on the other hand, insisted that no such action is currently underway. He also chastised the media source for what he saw as deceptive coverage, claiming that he had denied an invitation to a lunch interview, which Zhang eventually attended. “It was a trap!” he posted on X.

YZi Labs now employs a 12-person staff that prioritises long-term investment objectives above short-term rewards.

YZi Labs backs Avalon and Ethena as part of its new investment strategy.

Binance Labs, the venture arm of cryptocurrency exchange Binance, changed its name to YZi Labs in January, indicating a push towards larger investment objectives.

The organisation, co-led by Binance founder Changpeng Zhao (CZ) and long-time partner Ella Zhang, is now focused on blockchain, artificial intelligence, and biotechnology, while remaining connected to the Binance community.

Zhao, who stepped down from his exchange position last year, said the shift reflected his long-term goal of supporting technology with social and environmental effect.

“I’m a long-term investor who cares about impact, not returns,” he said, adding that YZi Labs will continue to incubate Web3 companies while expanding into other areas.

The business has previously supported high-profile enterprises. In May, it invested in Avalon Labs, a Bitcoin DeFi platform that is creating BTC-backed lending, a stablecoin called USDa, and credit services. The project presently handles over 20,000 BTC and has over $500 million in total value locked up.

Notably, in August, the company announced a strategic investment in USD. AI is a stablecoin protocol that aims to introduce infrastructure financing (InfraFi) to the blockchain by giving hardware-backed loans to AI operators.

YZi Labs also increased its stake in Ethena Labs, the protocol powering USDe, which is currently the third-largest US dollar-pegged crypto asset, with $13 billion invested.

The increased financing will help to expedite integration across exchanges and DeFi platforms, as well as enable new products such as a compliant stablecoin and an institutional settlement layer.