From Binance to Family Office: CZ Zhao’s New Investment Venture

Changpeng “CZ” Zhao, recently released from prison and now worth $70 billion following a surge in cryptocurrency values, has transformed Binance Holdings’ former venture capital arm into a family office. The entity, previously known as Binance Labs, has been rebranded as YZi Labs, according to an announcement on Thursday.

Ella Zhang, who helped establish Binance Labs in 2018 and departed two years later, has been brought back to lead the new initiative. YZi Labs will manage not only crypto-related assets but also the personal wealth of Binance co-founder Yi He, with whom Zhao shares three children.

Zhao, now 47, built Binance into a leading cryptocurrency exchange while maintaining that it operated without a centralized global headquarters. However, his approach to compliance led to legal trouble in 2023 when U.S. authorities charged Binance and Zhao with failing to prevent cybercriminals and terrorists from using the platform. Zhao agreed to a $50 million fine, resigned as CEO, and served four months in custody before his release in September.

Now operating as a family office, YZi Labs serves as an investment vehicle for Zhao and Yi He. A spokesperson for the firm noted that it operates without a formal headquarters, with staff working remotely. Ella Zhang stated that there is no immediate need for Zhao to inject additional funds into YZi Labs, as his $69.8 billion fortune, derived entirely from his stake in Binance, makes him the 22nd wealthiest person globally.

This pivot to a family office mirrors similar moves by other high-profile figures following legal challenges. For instance, Steve Cohen transformed SAC Capital Advisors into a family office in 2013 after the firm pleaded guilty to insider trading violations, though Cohen himself denied wrongdoing and was not personally charged.

Since his release, Zhao has expressed a commitment to prioritizing impact-focused investments. He announced plans to launch a nonprofit online education platform called Giggle Academy, which he described as a significant focus for his post-Binance endeavors. Binance has also begun severing its ties with its former venture capital unit.

Prior to its rebranding, Binance Labs had invested in hundreds of blockchain projects, including Sky Mavis, Aptos Labs, LayerZero, Polygon, and The Sandbox. With a portfolio valued at over $10 billion on paper, its assets potentially surpass the $7.6 billion in committed capital managed by Andreessen Horowitz’s a16z crypto and the $6.7 billion overseen by Polychain Capital as of May 2024.

Under the new YZi Labs banner, the firm plans to expand its focus beyond crypto into artificial intelligence and biotech investments. The team, currently consisting of nine members, will grow to as many as 20 as specialists in these fields are hired. Investment amounts will range from $500,000 to $50 million, with the firm also considering investments in liquid tokens.

Zhao will play an active role in investment decisions, serving on YZi Labs’ investment committee alongside Ella Zhang. She noted that Zhao’s reputation and network make him a valuable asset for sourcing potential opportunities.

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