CZ’s YZi Labs Doubles Ethena Investment as $10B Fund Eyes External Capital
TLDR
- Former Binance CEO’s YZi Labs fund doubled its investment in Ethena’s USDe synthetic stablecoin
- The $10 billion fund is exploring opening to external investors for the first time since 2022
- SEC requested private demo of YZi Labs portfolio, signaling improved crypto regulatory environment
- USDe uses crypto backing instead of traditional fiat reserves to maintain dollar stability
- YZi Labs portfolio includes 230+ companies like Aptos Labs, Polygon, and LayerZero
YZi Labs, the investment firm managing former Binance CEO Changpeng Zhao’s wealth, has doubled its stake in Ethena’s USDe stablecoin project. The move comes as the $10 billion fund considers reopening to external investors.
The fund manages Zhao’s personal fortune alongside capital from early Binance insiders, including co-founder Yi He. YZi Labs oversees investments in over 230 crypto and Web3 companies across its portfolio.
Ethena’s USDe represents a new approach to stablecoin design. Unlike traditional dollar-pegged tokens such as USDT or USDC, USDe uses crypto assets and specialized strategies to maintain price stability rather than fiat currency reserves.
This synthetic structure aims to reduce reliance on centralized banking systems. Traditional stablecoins face potential risks from banking freezes or regulatory pressure on their reserve holdings.
External Investment Consideration
YZi Labs is exploring plans to accept outside capital after operating primarily as a family office. Fund head Ella Zhang confirmed strong external investor interest in recent interviews.
The firm previously accepted $300 million in outside funding during 2022. However, it later returned portions of this capital due to the substantial assets already under management.
“We will eventually consider turning it into an external-facing fund,” Zhang explained. “We just think it’s not there yet.”
The portfolio spans major crypto projects including Aptos Labs, Polygon, 1inch Network, and Sky Mavis. Infrastructure companies like LayerZero, Mysten Labs, and CertiK also receive backing from the fund.
Regulatory Environment Shifts
The Securities and Exchange Commission recently requested a private demonstration of YZi Labs portfolio companies. This followed the SEC chair missing the fund’s demo day at the New York Stock Exchange.
Zhang interprets this as evidence of improving regulatory sentiment toward crypto investments. “Paul Atkins and other commissioners, they are very open-minded,” she noted.
Atkins assumed the SEC chair position in April 2025. This regulatory evolution coincides with growing institutional appetite for crypto-focused investment vehicles.
Galaxy Digital successfully raised $175 million for its first external venture fund in June, exceeding its initial $150 million target. The success demonstrates increasing demand for crypto-native investment opportunities.
Zhao stepped down from Binance after pleading guilty to Anti-Money Laundering violations. He completed a four-month prison sentence and currently seeks a presidential pardon while maintaining his position as Binance’s largest shareholder.
The increased Ethena investment reflects YZi Labs’ strategy of backing projects that combine strong technology with practical applications. USDe’s expansion across multiple blockchain networks could provide the stability and decentralization that traditional stablecoins lack.
YZi Labs continues managing substantial crypto investments while weighing external capital acceptance, positioning itself at the intersection of private wealth management and institutional crypto investment trends.
