Binance VC Arm’s $9 Billion Growth Amid Regulatory Challenges: An Overview

Binance Labs Ventures Despite Regulatory Pressure

Despite being sued by the Commodity Futures Trading Commission over unregistered trading activity in the US, Binance Labs, the venture arm of Binance, the world’s largest crypto exchange, continues to invest in the US. Its assets under management rose from $7.5bn in August 2022 to $9bn in Q1 2023.

Yibo Ling, Binance’s chief business officer, said the regulatory pressure does not affect Binance Labs, which invests in good projects from anywhere. In 2022, Binance Labs had a theoretical return of more than 10 times its investment, but Ling said the venture capital firm is buying and holding, and has only exited a few investments.

However, publicly available data shows Binance Labs has made fewer deals in the US this year. Binance Labs invested in only three firms in Q2 2023, according to The Block’s deals dashboard.

Binance Labs Team Structure

The Binance Labs team, with just a dozen or so staff, remains lean despite its large portfolio, according to Ling. In August 2022, Yi He, a co-founder of Binance, took over as head of Binance Labs, adding global strategy and day-to-day operations responsibilities to her existing role at Binance. Several executives have departed Binance Labs in recent years. Ling leads M&A and investments at Binance Labs, as well as business development for Binance.

Binance Labs Affiliation with Binance

Binance Labs’ affiliation with Binance provides access to the exchange’s resources and expertise, as well as its ecosystem, including Trust Wallet, CoinMarketCap, NodeReal, and Binance Oracle. Ling said that this association helps its startups tailor their products to industry needs, and having people in the flow of these new primitives can help orchestrate guidance and suggestions to its portfolio companies.

Conclusion

Despite the regulatory issues that Binance and its CEO are facing, Binance Labs continues to invest in US start-ups. Its team structure remains lean, but its affiliation with Binance provides it with a deep reservoir of resources and expertise, allowing it to help its startups tailor their products to industry needs.