YZi Labs explores public fund shift amid investor demand, regulatory interest, and potential expansion into AI and biotech investment sectors.
YZi Labs, the $10 billion investment firm founded by Changpeng Zhao, is evaluating a potential shift to a public fund structure. The firm, headed by CEO Ella Zhang, has reportedly attracted a high volume of interest from institutional investors looking to access its digital asset strategies.
Zhao Dismisses FT Report of Private SEC Meeting as False
The investment firm has one of the largest portfolios focused on blockchain in the market. Around 70 percent of its capital is used for digital assets. Investor proposals have emerged from over 50 groups in 2025, indicating an increasing need for exposure to decentralized technologies through regulation.
Reports came in that YZi Labs was preparing a fundraising round and preparing materials for outside investors. Changpeng Zhao responded on X platform denying these claims, saying that no pitch decks, demos, or investor meetings had occurred. He stressed that YZi Labs hasn’t solicited or had discussions with external investors since its rebranding.
The Financial Times had fileted reports of alleged interactions between YZi Labs and U.S. regulators, including a requested private meeting with SEC chairman Paul Atkins. Zhao denied these reports, stating that neither had he nor anyone at YZi Labs had held such discussions. He said the tale contained false elements and misrepresented both his firm’s operations and his past legal issues.
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Zhao’s legal history continues to attract media attention. In 2024, he was sentenced to four months in prison following his guilty plea on violations of the Bank Secrecy Act. Binance under his leadership, paid $4.3 billion in penalties for failures to comply. These violations, Zhao has argued, were not deliberate financial crimes, but regulatory oversights.
Public Fund Transition May Encourage Institutional Crypto Adoption
Regulatory interest in YZi Labs has also grown as the firm’s influence in the blockchain and crypto investment space increases. Observers say the SEC is curious about YZi Labs’ investment model and how it could affect regulated markets.
The company has previously dabbled in external capital. In the year 2022, it raised $300 million from outside backers but gave back most of the funds. The reasons for this decision were attributed to excess internal resources and strategic preference for self-funded operations.
A move to a public investment fund would entail an enhanced set of compliance requirements. Public funds are subject to certain legal requirements to ensure performance metrics, financial disclosure requirements, and liquidity requirements. The firm is more free right now to operate under a private structure with limited regulation.
Expansion into such sectors as artificial intelligence and biotechnology has also been discussed by YZi Labs leadership. These industries are seen as strategic areas of growth and could complement the firm’s blockchain expertise and market to wider institutional audiences.
Industry analysts suspect that the public conversion by YZi Labs could have an impact on other private digital asset firms. A successful transition could see more institutional use of crypto-related investment products and increased integration of traditional finance and emerging technologies.
