Changpeng Zhao, known as CZ, once the driving force behind the largest crypto exchange in the world, Binance is shifting gears. After stepping down as CEO of Binance in 2023 and serving a prison sentence for compliance violations, CZ is now diving into a new venture—YZi Labs.
YZi Labs is a reimagined version of Binance Labs, with a broader scope. Where Binance Labs focused primarily on blockchain startups, YZi Labs is expanding its reach to include artificial intelligence and biotechnology. This new initiative is being led by Ella Zhang, an experienced leader from Binance Labs’ early days, and will feature a 12-week residency program for startup founders. CZ remains involved, offering mentorship to new entrepreneurs.
YZi Labs’ first significant investment was a $16 million funding round for Sign, a platform aiming to improve blockchain credential verification and token distribution. The company’s flagship tool, TokenTable, tackles common problems with airdrops, like token supply mismanagement and fraudulent claims from fake accounts. CZ has emphasized the importance of blockchain infrastructure and trust-building mechanisms, saying, “Proper distribution builds trust, and verification is an essential part of it.”
Regulatory Scrutiny in France Intensifies
However, while CZ is looking forward, his past with Binance continues to haunt him. Regulatory scrutiny on the crypto exchange has not let up, particularly in France, where authorities have intensified their investigation into Binance’s operations.
French regulators are now investigating the company for alleged fraud, money laundering, and operating without the necessary approvals between 2019 and 2024.
The case, which began as a preliminary investigation in June 2023, was spurred by complaints from users who claimed to have lost money due to misleading information from the platform. The investigation is now broader, with a focus on Binance’s activities across the EU. The allegations range from money laundering to drug trafficking.
Binance has denied these allegations, calling them “several years old.” The company stated it has bolstered its compliance practices, including adopting more rigorous anti-money laundering measures. This is just the latest chapter in Binance’s ongoing regulatory struggles.
Binance Regulatory Violations In The US
After the collapse of FTX in 2022, cryptocurrency exchanges have faced increasing scrutiny. In 2023, U.S. regulators took action against Binance alleging violations of securities laws and other regulatory failures.
Binance reached a settlement with the U.S. Department of Justice in November 2023, agreeing to pay a record $4.3 billion to resolve charges. The company was accused of enabling illicit activities and failing to report suspicious transactions, some linked to terrorist organizations.
Despite stepping down as Binance’s CEO, CZ’s involvement in the company’s legal troubles remains a point of contention. The exchange continues to fight numerous regulatory battles globally. A lawsuit was filed by Australian regulators in late 2024 over alleged misclassification of clients. As CZ works on his new venture, the question remains: can he truly leave his past behind? or will the weight of Binance’s troubles pull him back into the regulatory crosshairs?
