- In June 2022, Binance Labs announced a new $500 million fund called Binance Labs Fund II to invest in web3 projects.
- As a result of the success of the exchange operator, Binance Labs has become one of the largest venture investors in the crypto world.
- In April, Yibo Ling, the then Chief Operating Officer of Binance, stated that the regulatory pressure on Binance in the U.S. did not affect “Labs” in any way.
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Binance exchange’s investment arm Binance Labs repaid the $500 million fund to external investors: Why did Binance Labs repay the funds?
Binance Labs Repays $500 Million Fund
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Binance Labs, the large-scale venture arm of Binance, repaid a $500 million fund to external investors during the summer. In June 2022, Binance Labs announced a new $500 million fund called Binance Labs Fund II to invest in web3 projects – this indicated the first time funds were raised from external investors by the arm.
Investors were announced among other unnamed institutions such as DST Global Partners and Breyer Capital, but Binance itself had provided the majority of the $500 million. However, a significant portion of the contribution made by external investors or Limited Partners (LPs) was repaid in the summer, according to three individuals familiar with the matter. One of these individuals stated that almost half of the total $150 million contributed to the Binance Labs fund by LPs had been repaid. It was added that this capital had not yet been invested in startup ventures.
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Binance Labs has become one of the largest venture investors in the crypto world as a result of the success of the exchange operator. Binance Labs, created in 2018 to transfer excess profits from Binance to startups, had become an investment and incubation arm with assets worth $9 billion by April. At that time, according to statements by company spokespeople, it had supported more than 200 projects and had achieved returns on paper exceeding its investment as of April.
It is not entirely clear why the venture unit repaid its LPs. In April, Yibo Ling, the then Chief Operating Officer of Binance, stated that the regulatory pressure on Binance in the U.S. did not affect “Labs” in any way. However, even in April, there were signs that Binance Labs had begun to make fewer deals in the U.S. – and since then, the pressure has increased significantly.
Changes in Binance Exchange
Yesterday, Binance’s co-founder and CEO Changpeng ‘CZ’ Zhao agreed to resign as part of an agreement with the U.S. Department of Justice. He admitted to violating the Bank Secrecy Act, agreed to pay a $50 million fine, and could still face imprisonment. Richard Teng, a former employee of Binance, was appointed as his successor. Binance itself will pay a massive $4.3 billion fine for violating money transmission laws and U.S. sanctions. Prosecutor Merrick B. Garland criticized the company with the following words: “Binance not only failed to comply with federal law – it acted as if it were above the law.”
Binance Labs has been managed by Yi He, one of Binance’s co-founders, since August 2022. It has experienced several executive departures over the years, including former head Bill Qian and Executive Director Nicole Zhang. Ling – who, in April, managed M&A and investments at Binance Labs and also served as Binance’s Chief Operating Officer – left the company in recent months, according to her LinkedIn profile.