DUBAI, March 12 (Reuters) – Abu Dhabi-backed investment group MGX has injected $2 billion into Binance, the world’s largest crypto exchange, according to a joint announcement by both companies on Wednesday. This marks what Binance is calling its first institutional investment and expands the relationship between the crypto giant and the United Arab Emirates.
The deal is among the largest ever seen in the cryptocurrency sector, which has enjoyed a resurgence following a turbulent period. The investment will see MGX become a minority shareholder in Binance. The investment was made in a stablecoin, a type of cryptocurrency linked to a fiat currency like the U.S. dollar, though the specific stablecoin was not disclosed. A Binance spokesperson and MGX declined to comment on the details, including the specific governance rights attached to MGX’s stake.
Founded in China in 2017 by Changpeng Zhao, often referred to as “CZ”, Binance quickly became the dominant force in cryptocurrency exchange, capitalizing on soaring demand for trading Bitcoin and other digital assets. Zhao pleaded guilty to violating U.S. laws against money laundering, facing significant scrutiny and time last year.
The exchange is deepening its ties with the UAE under the leadership of Richard Teng, CZ’s successor. Teng previously served as the head of Abu Dhabi’s Financial Services Authority.
Binance reported in the announcement that it has a “substantial footprint” in the UAE, with approximately 1,000 of its 5,000 global employees based in the country.
For MGX, this investment represents its inaugural public foray into the cryptocurrency market. Established almost exactly a year ago, MGX was created “to accelerate the development and adoption of AI and advanced technologies” through strategic partnerships, as stated at the time.
The UAE aims to establish itself as a global hub for digital assets. It has been actively trying to attract major crypto businesses to set up local operations as part of a broader initiative to diversify its economy.
“MGX’s investment in Binance reflects our commitment to advancing blockchain’s transformative potential for digital finance,” said Ahmed Yahia, managing director and CEO of MGX, in the statement. Blockchain serves as the underlying technology for 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. Mubadala, Abu Dhabi’s state-owned $330 billion wealth fund, is a partner in MGX.
Following a period of upheaval marked by collapses and scandals in 2022, the crypto industry has experienced a turnaround, with Bitcoin hitting new all-time highs.
A U.S. federal judge in February agreed to put a civil lawsuit by the U.S. Securities and Exchange Commission against Binance on hold for 60 days.
In December, Teng indicated that Binance was actively seeking a location for its global headquarters, a move that is seen as an attempt to improve transparency after the criminal charges against CZ and the $4.3 billion fine Binance agreed to pay in 2023 in the United States.
French investigators also opened a judicial probe into money laundering, tax fraud, and other charges at Binance, which has 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.
