CZ’s $10B YZi Labs May Open Fund to External Investors

The potential shift to an external fund structure represents a strategic response to mounting investor interest in cryptocurrency exposure. Under the leadership of CEO Ella Zhang, YZi Labs has observed consistent demand from outside backers seeking access to the firm’s carefully curated portfolio. This isn’t the firm’s first experience with external capital—in 2022, YZi Labs accepted $300 million from outside investors before returning some funds due to already sufficient internal capital. This disciplined approach reflects the firm’s focus on quality investments rather than asset accumulation.

YZi Labs’ investment strategy centers on crypto startups, artificial intelligence, and biotechnology projects, with digital assets dominating its portfolio. Recent investments in companies like Ethena Labs, whose USDe token has surged past $13 billion in total value locked, and Plume Network demonstrate the firm’s commitment to innovative Web3 projects. The firm is also exploring novel strategies, including using public companies to acquire tokens in treasury setups, leveraging its deep industry expertise to drive growth across the crypto ecosystem.

The changing regulatory environment appears to be a key factor in YZi Labs’ considerations. The US Securities and Exchange Commission, under Chair Paul Atkins, has taken an unusually open-minded approach, requesting private demonstrations of the firm’s portfolio companies. This regulatory warmth marks a significant departure from previous administrations and could potentially attract more crypto innovation back to traditional hubs like Silicon Valley.

CEO Ella Zhang has expressed appreciation for the receptive stance taken by Atkins and other regulators. This regulatory shift coincides with growing institutional confidence in digital assets, creating what YZi Labs perceives as an optimal environment for expanding investor access. The firm’s attention to regulatory developments is further evidenced by its investment in security-focused companies like OneKey, strengthening overall crypto security infrastructure.

With stakes in more than 230 companies, YZi Labs has established itself as a dominant force in crypto investing. The firm’s $10 billion portfolio gives it substantial influence over market development, particularly through its focus on emerging tokens and protocols. The firm’s attention to projects like $GATA, a new coin on Binance with a 7 million market capitalization that received YZi Labs backing, demonstrates its ability to identify promising early-stage opportunities.

The transition to an external fund structure could democratize access to YZi Labs’ investment strategy, allowing a broader range of investors to participate in crypto market growth. This move would align with CZ’s broader ecosystem development efforts, including the recent $1 billion fund expansion supporting the BNB ecosystem. As demand for crypto exposure continues to build, YZi Labs’ potential pivot could set new standards for institutional crypto investment vehicles while significantly influencing the industry’s development trajectory.