He ran the biggest crypto empire, stepped down, served time, and now he’s all about AI and biotech. But as CZ looks ahead, regulators in France are looking back.
From Binance to YZi Labs
Changpeng Zhao, more commonly known as “CZ,” once the most influential figure in crypto, is back — but this time, in a different role.
After stepping down as Binance’s CEO in 2023 and serving a four-month prison sentence in the U.S. for compliance failures, CZ has returned with YZi Labs — a rebranded version of Binance Labs that is expanding its focus beyond the crypto world.
Unlike its predecessor, which primarily nurtured blockchain startups, YZi Labs is broadening its scope, venturing into artificial intelligence and biotechnology.
The initiative will be led by Ella Zhang, a familiar face from Binance Labs’ early days, and will reintroduce a 12-week, in-person residency program for startup founders. CZ will also be involved, offering mentorship to the next generation of entrepreneurs.
YZi Labs has already made its first major investment, leading a $16 million funding round for Sign, a platform aiming to improve on-chain credential verification and token distribution.
The sign has developed TokenTable, a tool designed to address common issues with airdrops, such as token supply mismanagement and fraudulent claims from fake accounts.
CZ has signalled that blockchain infrastructure and trust mechanisms remain core to his vision, stating in a Fortune report, “Proper distribution builds trust, and verification is an essential part of it.”
But while CZ is looking ahead, Binance is still tied up in regulatory battles. French authorities have launched a new probe into alleged fraud and money laundering, adding to the exchange’s history of legal troubles.
CZ may have stepped away from Binance, but will regulators and the industry let him move on that easily? And as Binance fights for its future, how far will its past pull CZ back in? Let’s try to decode.
Binance’s never-ending troubles
On Jan. 28, French authorities escalated their investigation into Binance, launching a judicial probe into alleged money laundering, tax fraud, and the provision of unauthorized digital asset services, Reuters reported.
The Paris Public Prosecutor’s Office confirmed that the investigation covers Binance’s activities between 2019 and 2024, with a particular focus on money laundering linked to drug trafficking.
This marks a key development in a case that began as a preliminary investigation in June 2023, prompted by complaints from users who claimed to have lost money due to misleading information provided by the platform.
The allegations now also extend to Binance’s operations in France and across the European Union, where the company is accused of operating without proper regulatory approvals.
In response, Binance has denied the allegations, describing them as “several years old.” The company has stated, “Binance fully denies the allegations and will vigorously fight any charges made against it.”
Binance further clarified that it has since strengthened its compliance measures, aligning with anti-money laundering and know-your-customer standards, and enhanced employee training programs.
This investigation is the latest in a series of legal and regulatory challenges for Binance amid growing scrutiny of cryptocurrency exchanges following the collapse of FTX in 2022.
In 2023, U.S. authorities, including the Securities and Exchange Commission and the Department of Justice, took legal action against major platforms like Binance and Coinbase, alleging violations of securities laws and other regulatory failures.
While Coinbase pushed back against the SEC’s claims, Binance settled with the DOJ in November 2023, agreeing to pay a historic $4.3 billion — marking the largest corporate compliance penalty ever imposed.
U.S. prosecutors accused Binance of operating with a “Wild West” approach, allegedly facilitating illicit activities and failing to report over 100,000 suspicious transactions tied to terrorist organizations and other criminal groups.
As part of the settlement, CZ stepped down as CEO, with Richard Teng appointed as his replacement. However, the legal troubles did not end there.
Binance also faced regulatory action in other regions, including in December 2024, when Australia’s financial regulator sued the company’s local derivatives business, alleging misclassification of retail clients as wholesale investors — thereby denying them essential consumer protections.
YZi Labs’ expanding investment portfolio
As Binance grapples with mounting legal challenges, CZ is pushing forward with YZi Labs, backing projects that signal a clear break from his past role as an exchange operator.
In 2024, YZi Labs (previously Binance Labs) actively expanded its investment portfolio, focusing on emerging technologies. Throughout the year, the firm invested in 46 projects across various sectors, including decentralized finance, AI, gaming, and DeSci.
In August 2024, YZi Labs announced investments in two AI-focused companies to support the development of AI-powered decentralized applications.
One of these was Sahara AI, a startup that integrates blockchain and AI technologies. Sahara AI enables users to maintain intellectual property rights through on-chain attribution and earn rewards for contributing to the decentralized AI’s infrastructure, knowledge base, and maintenance.
The company secured $43 million in a Series A funding round led by Pantera Capital, YZi Labs, and Polychain Capital, with participation from Samsung NEXT and others.
Another notable investment was in MyShell, an AI startup that allows users to build and share AI-powered applications, empowering developers to create customizable AI solutions.
In November 2024, YZi Labs also ventured into the decentralized science sector by investing in BIO Protocol, an accelerator program focused on capital formation for biotechnologies. BIO Protocol supports a collection of decentralized autonomous organizations committed to developing pharmaceutical drugs and life-saving treatments.
But while YZi Labs is expanding in new directions, CZ’s past is never far behind. His financial backing and continued presence in blockchain-related ventures keep him connected to an industry still dealing with the fallout of Binance’s legal troubles.
What’s CZ up to?
CZ began shaping his next steps even before serving his four-month U.S. prison sentence in March 2024. Just days before reporting in, he tweeted, “Launching a new project. No, no new tokens. Education project. More details soon…”
The following day, he unveiled Giggle Academy, describing it as a free, gamified, and adaptive learning platform for students in grades 1–12. “No revenue. Gamified. Adaptive,” he wrote, sharing a link to the project’s concept paper and announcing he was hiring a small team to work directly with him.
In September 2024, after completing his sentence, Zhao returned to social media with a personal update. “gm, the food tastes so good… And what a luxury to be able to have more than one piece of fruit per day!” he shared, offering a throbbing glimpse into his time in prison.
In the same post, he outlined his next priorities: “Giggle Academy is going well and will be a big part of my life for the next few years. I will continue to invest in blockchain/decentralized technologies, AI, and biotech. I am a long-term investor who cares about impact, not returns.”
The following month, in October 2024, Zhao made his first public appearance at Binance Blockchain Week, where he was greeted with a packed room and a standing ovation. Moderator Austin Arnold opened with, “First question, how was your summer?”
Zhao responded candidly, “It’s not good. It’s less fun than now. I think the whole experience is just very limiting in a lot of ways, right? Your freedom is taken away and you have nothing to do, so it gives you a lot of time to reflect.”
While he avoided directly criticizing his case, he noted that he was “the first person to go to prison over a Bank Secrecy Act violation,” contrasting his situation with that of large financial institutions where executives faced settlements but not jail time. More importantly, CZ confirmed that he has no plans to run another crypto exchange.
In December 2024, CZ announced the launch of the Giggle Academy iOS app, inviting parents with young children aged 2–6 to test it out, further expanding the project’s reach.
Meanwhile, talking about the rise of meme coins, including Donald Trump’s recent launch of his own meme coin Official Trump (TRUMP), CZ jokingly tweeted, “No, I currently have no plan to make a meme coin. But I am guessing a few other country leaders might be thinking about it.”
As CZ and YZi Labs focus on building his next chapter, the unresolved legal battles surrounding Binance continue to cast a shadow over his future.
The question remains whether his departure from the company truly severs his ties to its ongoing challenges or if his past involvement will continue to follow him in the years ahead.
Credit: Source link
