CZ's New Venture with YZi Labs Amidst Binance's Ongoing Regulatory Troubles

Changpeng Zhao, more widely known as CZ, is no stranger to controversy and change. Once the head of Binance, the world’s largest cryptocurrency exchange, CZ stepped down as CEO in 2023 after facing regulatory pressure and legal challenges. Following a four-month prison sentence in the U.S. for compliance failures, CZ is now focusing on a new chapter with YZi Labs — a rebranded and expanded version of Binance Labs that aims to shape the future with a broader focus on artificial intelligence (AI) and biotechnology.

A New Focus with YZi Labs

YZi Labs marks a significant shift in CZ’s business strategy, as it moves away from the blockchain-focused initiatives of Binance Labs. Under the leadership of Ella Zhang, a former Binance Labs executive, YZi Labs is now investing in emerging technologies that go beyond the crypto sphere, including AI and biotech.

YZi Labs has already made its mark, leading a $16 million funding round for Sign, a platform aimed at enhancing on-chain credential verification and token distribution. The project’s innovative TokenTable tool is designed to address common challenges in the crypto space, such as token supply mismanagement and fraudulent claims during airdrops. As CZ himself stated in a recent Fortune report, “Proper distribution builds trust, and verification is an essential part of it.”

This expansion reflects CZ’s evolving vision, where blockchain infrastructure and trust mechanisms remain at the core, but with a wider scope that extends to transformative sectors like AI and biotech.

Binance’s Legal Struggles Continue

However, even as CZ shifts his focus to the future, his past with Binance continues to haunt him. French authorities, on January 28, 2025, escalated their investigation into Binance, launching a judicial probe into alleged money laundering, tax fraud, and the provision of unauthorized digital asset services. The investigation covers Binance’s activities from 2019 to 2024, with a particular focus on potential links to drug trafficking.

This is not the first time Binance has faced legal scrutiny. The case began as a preliminary investigation in June 2023, following complaints from users who claimed to have lost money due to misleading information on the platform. The investigation also touches on Binance’s operations across the European Union, where the company allegedly operated without proper regulatory approvals.

Binance has vigorously denied these allegations, describing them as "several years old" and asserting that it has since strengthened its compliance measures, including enhancing anti-money laundering protocols and know-your-customer (KYC) standards.

These legal challenges are just part of the broader picture for Binance. In 2023, the U.S. Department of Justice (DOJ) imposed a historic $4.3 billion settlement on the company, accusing it of facilitating illicit activities and failing to report suspicious transactions linked to terrorist organizations and criminal groups. CZ’s departure from Binance was part of the settlement, with Richard Teng assuming the role of CEO. However, the legal battles continued, with regulatory actions in other countries, including Australia, adding to the pressure.

YZi Labs and a New Direction for CZ

Amidst these challenges, CZ is actively pushing forward with YZi Labs, which has expanded its investment portfolio to include 46 projects across various sectors such as decentralized finance, gaming, AI, and decentralized science (DeSci).

In 2024, YZi Labs made notable investments in AI, including Sahara AI, a startup integrating blockchain and AI technologies. Sahara AI enables users to maintain intellectual property rights on-chain and earn rewards for their contributions to the decentralized AI infrastructure. The company raised $43 million in a Series A funding round, led by Pantera Capital, YZi Labs, and Polychain Capital. Another notable investment was in MyShell, a startup focused on building AI-powered applications.

YZi Labs also made a foray into decentralized science by investing in BIO Protocol, an accelerator program supporting decentralized autonomous organizations (DAOs) in the biotech sector. The initiative aims to develop pharmaceutical drugs and life-saving treatments through decentralized collaboration.

Despite this push into new industries, CZ’s ties to the crypto world remain strong. His financial backing of projects within blockchain and decentralized technologies keeps him tethered to the industry, even as he seeks to distance himself from the troubles surrounding Binance.

CZ’s Next Steps: Giggle Academy and Future Investments

Even before his prison sentence, CZ began shaping his next steps. In March 2024, just before reporting to prison, he announced the launch of Giggle Academy, a free, gamified educational platform designed for students in grades 1–12. Following his release in September 2024, CZ continued to focus on education, stating that Giggle Academy would be a significant part of his life for the years to come.

In addition to his work with YZi Labs, CZ reaffirmed his commitment to long-term investments in AI, blockchain, and biotech, positioning himself as an investor who values impact over immediate financial returns.

In December 2024, CZ also expanded Giggle Academy’s reach with the launch of an iOS app for parents of young children, further demonstrating his commitment to shaping the future through education and technology. Despite his many ventures, CZ’s humor remains intact, joking on Twitter about the rise of meme coins, including one launched by former President Donald Trump, while assuring followers that he had no plans to create his own.

The Shadow of Binance’s Past

Despite these new endeavors, the ongoing legal challenges surrounding Binance continue to cast a long shadow over CZ’s future. His departure from the company has not fully severed his ties to the exchange’s ongoing battles. The question remains whether CZ can truly move on from his past with Binance or whether regulators and the industry will continue to tie him to the platform’s legal struggles for years to come.

As CZ embarks on a new chapter with YZi Labs and other ventures, the unresolved legal issues surrounding Binance are likely to continue to follow him, but how deeply they will impact his future remains to be seen. One thing is clear: while his past in crypto may still haunt him, CZ is determined to leave a lasting legacy in the realms of AI, biotech, and beyond.