Abu Dhabi-backed investment group MGX has injected $2 billion into Binance via a cryptocurrency investment, the companies announced Wednesday. This move deepens the relationship between the world’s largest crypto exchange and the United Arab Emirates.
The Binance logo is displayed on a smartphone.
The deal is a landmark one for Binance, recognized as its first institutional investment. Upon completion, MGX will become a minority shareholder after investing in a stablecoin, a cryptocurrency tied to a fiat currency such as the U.S. dollar.
A Binance spokesperson declined to provide specifics regarding the investment arrangement, citing agreed governance rights, the size of MGX’s stake, and the particular stablecoin used. MGX also refrained from providing comment.
Established in China in 2017 by Changpeng Zhao, often known as “CZ,” Binance rapidly became the world’s leading crypto exchange, capitalizing on the explosive demand for Bitcoin and other cryptocurrencies. Zhao recently spent time in jail after pleading guilty to violating U.S. anti-money laundering laws.
Under the leadership of Richard Teng, CZ’s successor, Binance has strengthened its connection with the UAE. Teng previously headed Abu Dhabi’s Financial Services Authority.
Binance reported in Wednesday’s announcement that it maintains a “substantial footprint” in the UAE, employing around 1,000 of its 5,000 global staff within the country.
The investment in Binance marks MGX’s inaugural public venture into the crypto space. The group was founded nearly a year ago to “accelerate the development and adoption of AI and advanced technologies” through partnerships.
The UAE is actively pursuing its ambition to become a global hub for digital assets, including cryptocurrencies. As part of its strategy to diversify its economy, the nation has been striving to attract significant firms to establish a local presence.
“MGX’s investment in Binance reflects our commitment to advancing blockchain’s transformative potential for digital finance,” stated Ahmed Yahia, managing director and CEO of MGX. Blockchain is the technology that underpins cryptocurrencies.
MGX, which has also invested in OpenAI and Elon Musk’s xAI, is chaired by Sheikh Tahnoon bin Zayed Al Nahyan, the UAE’s national security adviser and a brother of UAE President Sheikh Mohammed bin Zayed. Abu Dhabi’s state-owned $330 billion wealth fund Mubadala is a partner in MGX.
The cryptocurrency industry has seen a resurgence in the past year, recovering from a period of collapses and scandals from 2022 that exposed significant misconduct and resulted in substantial investor losses. Bitcoin, the leading cryptocurrency, reached all-time highs following the U.S. election of Donald Trump, who has expressed a pro-crypto stance.
In February, a U.S. federal judge agreed to a 60-day hold on a civil lawsuit filed by the U.S. Securities and Exchange Commission against Binance.
In December, Teng disclosed to Reuters that Binance was actively seeking a location for its global headquarters. This move is seen as part of an initiative to boost transparency following the criminal charges against CZ and the $4.3 billion fine Binance agreed to pay in the United States in 2023.
French investigators initiated a judicial probe in January into claims of money laundering, tax fraud, and other offenses at Binance, which denied the allegations.
“This investment by MGX is a significant milestone for the crypto industry and for Binance. Together, we are shaping the future of digital finance,” Teng said.
(Reporting by Elizabeth Howcroft in Paris and Federico Maccioni in Dubai. Editing by Tommy Reggiori Wilkes and Mark Potter)
