(Bloomberg) -- Crypto exchange Binance quietly spun off its $10 billion venture capital arm earlier this year in one of the most notable developments yet of Chief Executive Officer Richard Teng’s four-month-old tenure.

Binance Labs has become an independent entity and severed some ties with the wider group, a spokesperson for the former unit said. Binance Labs staff now have separate contracts to those of exchange employees, the spokesperson added, similar to the setup at Binance-backed digital ledger BNB Chain.

“We’re not part of the Binance group,” said Binance Labs Investment Director Alex Odagiu. The venture capital affiliate will license the Binance brand, he said.

The crypto industry is alert for changes at Binance, the world’s largest digital-asset exchange, in the wake of a November plea deal with US agencies that led to a giant $4.3 billion penalty and unseated founder Changpeng Zhao as CEO. 

Disclaimer text on the Binance Labs website added earlier in 2024 clarifies that the outfit is “an independent venture and not part of the Binance Group nor is it involved in any of the businesses operated by the Binance Group (including but not limited to the Binance cryptocurrency exchange).”

A spokesperson for the group declined to comment on the shift to making Binance Labs independent.

Prolific Investor

Binance Labs is led by Yi He, who co-founded Binance alongside Zhao. The venture capital operation is predominantly funded by the exchange’s profits and is a prolific early-stage backer of crypto projects. It is both a venture capital investor and an incubator, running one program focused on startups building on BNB Chain and another that is blockchain-agnostic.  

Binance Labs has invested in around 250 projects to date, including the likes of Sky Mavis, Aptos Labs, LayerZero, Polygon and The Sandbox. The outfit’s assets are now worth over $10 billion in terms of their value on paper, according to a recent Binance Labs announcement about applications opening for the seventh season of its incubation program.

Many major exchange operators in crypto — including Coinbase Global Inc., Kraken and OKX — also run venture capital businesses. Coinbase Ventures was the second-most active investor in the crypto sector in 2023, according to PitchBook data.

Operationally, independence will change little for Binance Labs, according to the company’s spokesperson.

“Our primary goal is to identify projects and invest in them and this has not changed,” Odagiu said. “It’s been our focus for the most part since the inception of Binance Labs, which we started as a team in 2018.”

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