From Circle to YZI Labs: How China’s Boutique Investment Bank China Renaissance Bets Big on Web3

The summer of 2025 has brought China Renaissance into the spotlight once again. The investment bank has signed a memorandum of understanding with YZi Labs, formerly Binance Labs, committing $100 million to heavily invest in BNB Chain’s native token, BNB.

Just two months earlier, its board approved another $100 million fund targeting the Web3 and cryptocurrency sectors. These consecutive moves have sparked widespread speculation that China Renaissance might be planning a profound transformation or even a complete reinvention of itself.

In China’s investment banking landscape, China Renaissance has always stood out as a unique player.

It lacks the state-owned backing of giants like CICC or CITIC, and it doesn’t have the century-long legacy of Goldman Sachs or Morgan Stanley. Instead, its growth trajectory has been closely tied to the explosive rise of China’s internet economy.

Since its establishment in 2005, China Renaissance has witnessed and orchestrated landmark deals such as the merger of Didi Chuxing and Kuaidi Dache, the union of Meituan Dianping, and the integration of 58.com and Ganji.com.

Behind almost every industry-shaping merger, China Renaissance has left its mark. Without the wild growth of the internet during that decade, the firm might never have earned the title of “King of M&A.”

But as the tide recedes and the internet economy transitions from an era of expansion to one of fierce competition, the landscape is shifting. With the looming specter of antitrust crackdowns, the fertile ground that once sustained China Renaissance is undergoing fundamental changes.

This once-glorious boutique investment bank now faces unprecedented survival challenges.

Is its foray into Web3 a desperate act of self-rescue, or does it reflect the inevitable fate of traditional investment banks in the digital age?

The King of M&A Faces Challenges

In 2021, China Renaissance delivered an almost flawless performance. The firm reported a total revenue of RMB 2.504 billion for the year, with net profit growing by an impressive 56.5% year-on-year to RMB 1.624 billion.

During that period, China Renaissance successfully managed high-profile projects such as the Hong Kong IPO of Li Auto and the listing of Kuaishou Technology. In the annual report, Bao Fan expressed his excitement, stating, "We are standing at the starting point of the next decade of the new economy."

However, peaks often signal the beginning of a decline.

By 2022, China Renaissance Holdings experienced a sharp drop in both revenue and net profit. The firm reported annual revenue of RMB 1.533 billion, marking an 8.36% year-on-year decrease, and recorded a loss of RMB 564 million, reflecting a 134.71% decline compared to the previous year.

Behind these numbers lies the stark reality of a cooling macroeconomic environment.

Data from the 2022 Review and Outlook of China's Corporate M&A Market revealed that the total value of mergers and acquisitions nationwide fell by 23.5% year-on-year, with the TMT sector suffering an even steeper decline of 41%.

For China Renaissance, whose growth heavily relied on TMT-related M&A deals, this was akin to losing the very foundation it was built upon.

The deeper crisis, however, is rooted not in the numbers but in the business model itself.

China Renaissance rose to prominence by capitalizing on the golden era of China's internet economy, a time marked by rapid growth and aggressive expansion. It was an era where startups aimed to scale quickly, industry giants sought to dominate entire sectors, and investors were eager to sell compelling narratives.

China Renaissance positioned itself as the "super connector" of this capital-driven frenzy. Bao Fan's personal charisma, extensive network, and sharp intuition for industry trends formed the company's competitive edge.

As long as the market thrived on growth cycles and M&A remained the preferred strategy in capital markets, China Renaissance was in its element. The firm played a pivotal role in almost every major deal that reshaped the industry landscape.

But when the environment shifted, the story took a different turn. The market transitioned into a phase of stock competition, where "stronger together" strategies faced increasing scrutiny from regulators. The once-successful business model found itself without a stage to perform.

This is China Renaissance's real dilemma. The issue is not simply declining business performance but the obsolescence of its foundational model in the face of changing times.

Its centralized network of connections, closed channels of information, and relationship-driven value creation seem increasingly out of place in a world that prioritizes transparency, openness, and disintermediation.

This challenge is particularly pronounced in the company’s culture, which revolves around Bao Fan. Reuters quoted an individual familiar with Bao as saying that China Renaissance remains a "one-man business" or "key-person-focused" operation, a model that struggles to adapt to the demands of the new era.

The Hidden Web3 Strategy

China Renaissance’s exploration of Web3 was far from a spur-of-the-moment decision.

In May 2018, Circle announced the completion of its $110 million Series E funding round. The list of investors was packed with top-tier institutions such as IDG, Breyer Capital, and Bitmain. Few noticed that China Renaissance was also among them.

If not for the congratulatory message sent by China Renaissance in June 2025, the public might have remained unaware that the firm had long entered the stablecoin sector. A closer look at Circle’s prospectus reveals that China Renaissance is not listed as a major shareholder, suggesting a limited stake or an exit before Circle went public.

Even so, China Renaissance’s investment in Circle still sparked excitement among investors.

After being recognized as part of the "Circle ecosystem," China Renaissance’s stock price surged from HK$3 to over HK$6, achieving growth of more than 100%. For a company whose stock had been on a long-term downward trend since its IPO, this was undoubtedly a much-needed boost.

China Renaissance’s investment in Circle stemmed from Bao Fan’s foresight years earlier.

In 2015, China Renaissance was at its peak, dominating China’s new economy as the hottest investment bank in the sector. The firm was involved in nearly every major merger and financing deal for leading internet companies. Yet, at the height of its success, Bao Fan made a surprising statement: "Three years from now, we might struggle to survive."

That remark marked the beginning of China Renaissance’s transformation. Bao Fan understood that relying solely on advisory fees and commissions was too fragile a model. The firm needed to find new growth engines. Thus, he shifted the firm’s role from "service provider" to "participant," transforming it from an advisor to a shareholder.

In China Renaissance’s broader investment portfolio, Circle was not particularly eye-catching. Around the same time, the firm backed major players such as Meituan Dianping, JD Digits, Kuaishou Technology, Li Auto, NIO, and Pop Mart. Compared to these big names, a U.S.-based cryptocurrency payment company seemed somewhat unconventional.

Moreover, Lei Ming, who led the Circle investment, later admitted that luck played a role in securing the deal. China Renaissance entered the round late and held a relatively small stake, making it hard to say the firm profited significantly.

Beyond Circle, China Renaissance left its mark in the crypto space through various initiatives. It directly invested in Amber Group and Matrixport, acted as a financial advisor for Canaan, Bitdeer, and HashKey, and even appointed Frank Fu Kan, who has years of blockchain experience, as an independent non-executive director.

However, these efforts did not immediately translate into impressive results. Reports from 36Kr highlighted that China Renaissance primarily generated modest revenue through financing services in the crypto sector, rather than securing substantial returns from capital investments. The value of Circle to China Renaissance lies more in its potential and the recovery of its market valuation.

The Gamble in the Post-Bao Fan Era

2024 marked the beginning of a new chapter for China Renaissance.

Following Bao Fan’s disappearance, his wife, Xu Yanqing, stepped into the spotlight, taking the helm of the boutique investment bank. With former CEO Xie Yijing out of the picture, the firm established a leadership trio consisting of Chairwoman Xu Yanqing, CEO Wang Lixing, and Executive Director Du Yongbo.

Xu Yanqing introduced the “China Renaissance 2.0” strategy, which aimed to reduce reliance on traditional internet businesses and focus on hard tech, Web3, and digital finance.

This strategic pivot was not a whimsical move but rather a calculated decision aligned with policy developments.

In May 2025, Hong Kong’s Legislative Council passed the Stablecoin Bill. A month later, the government released the Digital Asset Development Policy Statement 2.0. Around the same time, China Renaissance announced that its board had approved a $100 million budget to formally enter the Web3 and crypto asset sectors.

This decision carried echoes of the firm’s earlier successes. In the past, China Renaissance excelled at capitalizing on pivotal moments, helping Chinese internet companies thrive during a decade of rapid growth. Now, it seemed poised to replicate its success in a new arena. However, this time, Bao Fan was no longer part of the picture.

In August, the firm signed a memorandum of understanding with YZi Labs, planning to allocate $100 million to acquire BNB assets. This move made China Renaissance the first Hong Kong-listed company to include BNB in its digital asset portfolio. The market quickly drew parallels, dubbing it the “BNB MicroStrategy” of Hong Kong stocks.

Purchasing crypto assets was merely a starting point. China Renaissance outlined two additional initiatives to bolster the BNB ecosystem.

The first involved collaborating with China Asset Management (Hong Kong) and other partners to develop fund-based products, facilitating BNB’s listing on Hong Kong’s regulated virtual asset exchanges. Coincidentally, on September 3, Hong Kong’s compliant trading platform OSL began offering BNB trading services to professional investors, becoming the first exchange in Hong Kong to support BNB trading.

The second initiative focused on establishing a multi-billion-dollar RWA fund with assistance from YZi Labs. This fund aimed to promote the adoption of BNB blockchain applications in stablecoins and RWA scenarios among Hong Kong-listed companies.

Through these moves, China Renaissance sought to leverage Binance’s dominant position in the crypto industry and solidify its role as a key Web3 player.

On August 29, during the BNB Chain’s fifth-anniversary celebration, Xu Yanqing engaged in a dialogue with YZi Labs’ head Ella Zhang. She remarked, “Since establishing our strategic partnership with YZi Labs, we’ve received numerous inquiries from traditional financial institutions. These institutions are no longer asking why they should invest in digital assets but are instead focusing on how to properly allocate core assets like BNB, which represent the future of financial ecosystems.”

Xu further emphasized, “China Renaissance aims to be more than just a bridge connecting the Web2 and Web3 worlds. With our expertise in investment banking, asset management, and wealth management, we aspire to lead the charge and become the most iconic investment bank in the Web3 era.”

The firm’s rationale is clear:

External logic: For traditional institutions looking to enter the crypto market, direct investment often entails higher risks. Investing in China Renaissance stock offers an indirect exposure to crypto assets.

Internal logic: The convergence of Web3 and Web2 will inevitably create new financing and merger opportunities, potentially replicating the “decade of internet mergers.”

In other words, China Renaissance aims to continue playing its role as the “top investment bank” capable of shaping market dynamics within the crypto world.

While the vision is ambitious, the practical challenges of execution remain significant.

The Challenges of Transformation

As a boutique investment bank that built its reputation on TMT mergers and acquisitions, China Renaissance’s core strength has always been its deep understanding of China’s internet industry and its extensive network of connections with founders.

In the traditional investment banking world, the incentives are straightforward: commission splits, short-term performance, and quick results. Employees in this field are typically “professional service providers” who complete transactions and collect fees.

For China Renaissance, fully entering the crypto market means confronting a harsh reality: many top-tier traditional capital players have struggled and failed in this emerging sector.

The first challenge is the inevitable decline of the FA model.

During the golden age of internet M&A, China Renaissance became a “super connector” by leveraging its network and exploiting information asymmetry. It had exclusive knowledge of who was raising funds, who was selling, and how valuations were determined. This type of information was only accessible to a select few investment banks.

However, in the blockchain world, capital flows, governance voting, and protocol data are almost entirely transparent, allowing anyone to track them in real time. Except for a few large Asian exchanges or asset management institutions that may require FA assistance for fundraising, most projects operate more like “crowdfunding investments.”

Some, such as derivative platforms like Hyperliquid, don’t even require external funding from the start. As a result, the negotiation and matchmaking advantages that investment banks once held are no longer significant.

To achieve substantial returns, China Renaissance must directly participate in investments.

“Being an FA is mainly about making connections; earning money comes through investing,” remarked an FA practitioner who ventured into the crypto world. While they successfully made connections and initiated investments, they also managed to lose money in the process.

The primary market in the crypto world is notoriously risky. To excel in investments, one must have a profound understanding of the market’s underlying logic, maintain strong connections with top-tier entrepreneurs, and provide continuous support.

However, the crypto space is often riddled with short-term narrative traps.

A project that aligns perfectly with a trending narrative can see its valuation skyrocket within months. Yet, when the narrative fades, its market value can plummet, leaving teams without sustainable business models and reliant on selling tokens to survive. Valuations continue to decline.

Moreover, the market has largely lost faith in altcoins, with capital now concentrated on leading assets like BTC, ETH, and SOL. Even the currently popular “crypto-equity linkage” model may eventually be disproven.

For China Renaissance, this creates two layers of risk:

• First, whether its investment vision can penetrate these narrative traps.

• Second, the risk to its reputation.

The rapid cycles in the crypto market far exceed those of traditional markets. A protocol hack or a project collapse can destroy market value within 48 hours. If China Renaissance missteps, it risks not only financial losses but also the erosion of its hard-earned reputation as a “boutique investment bank.”

Consider Temasek, Singapore’s sovereign wealth fund, which lost approximately $275 million in FTX. More damaging than the financial loss was the reputational hit it suffered as a state-backed investor. Temasek faced parliamentary scrutiny and was forced to admit “significant due diligence failures,” tarnishing its credibility.

From this perspective, the optimal path for China Renaissance may not be to recreate a crypto version of its “M&A king” status but to pivot toward becoming a major secondary market player. By strategically allocating assets like BTC, ETH, and BNB, combined with quantitative strategies and risk hedging, it could aim for steady returns.

But this route is equally perilous.

Trading requires competing with professional quantitative funds, crypto-native trading teams, and multinational market makers. Without robust technical capabilities, risk management systems, and on-chain data insights, relying solely on its traditional investment banking brand and network won’t establish a real advantage.

China Renaissance finds itself in an awkward position:

The FA model no longer offers information advantages. Venture capital investments are fraught with narrative traps. Secondary market operations lack native expertise.

This dilemma is not unique to China Renaissance; many traditional FA/VC firms face similar challenges in the crypto world. To establish a foothold in Web3, they need not only capital but also a complete overhaul of their understanding.

The firm must answer a fundamental question: In this transparent, disintermediated world, what is China Renaissance’s true value?

Looking back from 2025, China Renaissance’s Web3 transformation feels more like an experiment it was forced into rather than a proactive choice. The environment gradually backed it into a corner.

Two decades ago, China Renaissance rose to prominence by seizing the window of opportunity presented by China’s internet boom. At that time, Bao Fan embodied the spirit of a challenger, using the concept of an “investment bank that understands the internet” to disrupt traditional finance.

Today’s situation is entirely different. Web3 is not about moving offline businesses online but about rewriting the very logic of finance. Decentralization, permissionless systems, and community governance directly challenge the intermediary role that investment banks depend on for survival.

This shift in roles makes the problem even more acute. China Renaissance was once a startup that could move nimbly. Now, it is an established player. Fully committing to a new track requires sacrifices and betrayals. For an institution already etched into China’s M&A history, such choices are far more painful than they were twenty years ago.

Globally, traditional financial institutions have rarely achieved meaningful breakthroughs in digital asset transformations. Goldman Sachs was one of the earliest investment banks to explore this space, yet its digital asset business remains negligible in its overall revenue. The common challenge in the industry is whether to undergo self-revolution or be replaced by new entities.

For China Renaissance, however, there is no turning back.