Abu Dhabi’s MGX is making a significant move into the cryptocurrency sector with a $2 billion investment in Binance, marking one of the largest institutional deals in the digital asset industry. This investment represents the first institutional backing for Binance, the world’s largest cryptocurrency exchange, signaling a notable shift in MGX’s investment strategy.
As per reports, the investment will be made through stablecoins, though neither Binance nor MGX disclosed which specific stablecoin would be used. Stablecoins, a key component of the crypto market, are designed to maintain a fixed value and are typically pegged to fiat currencies like the US dollar.
MGX, an AI-focused fund launched last year, is chaired by Sheikh Tahnoon bin Zayed al-Nahyan, the UAE’s national security adviser and a key figure in the country’s push for artificial intelligence-driven economic diversification.
The fund has already made high-profile investments, including a partnership with BlackRock and Microsoft in September to establish a $30 billion AI-focused investment initiative. While MGX had not previously shown interest in the cryptocurrency space, it stated that it “aims to enable innovation at the intersection of AI, blockchain technology and finance.”
Binance, which processes daily transactions worth around $20 billion, has been focusing on strengthening its presence in the UAE as it looks to rebuild its global standing. The exchange faced regulatory scrutiny in the US, culminating in a $4.3 billion fine in 2023 for failing to prevent money laundering and violating international sanctions.
Despite these challenges, Binance has been expanding its operations in the UAE, where it employs around 1,000 people and holds a regulatory license from Dubai’s crypto watchdog. Its CEO, Richard Teng, previously led Abu Dhabi Global Market’s financial regulator and is currently based in the country.
The timing of the deal coincides with renewed optimism in the crypto market, fueled by political developments in the US. Former President Donald Trump’s campaign has embraced cryptocurrency, driving prices to record highs and boosting investor sentiment.
Meanwhile, Abu Dhabi continues to position itself as a global hub for digital assets, implementing crypto-friendly regulations to attract international firms.
While Binance and MGX have not disclosed details on the size of the stake or whether the deal has been finalized, the investment underscores Abu Dhabi’s growing role in shaping the future of digital finance. Binance’s majority ownership remains with its founder, Changpeng Zhao, who stepped down as CEO after the US settlement and recently completed a four-month prison sentence for failing to implement adequate anti-money laundering controls.
Editorial Note: This news article has been written with assistance from AI. Edited & fact-checked by the Editorial Team.
