Abu Dhabi's MGX Invested $2 Billion in Crypto Investments in Binance

Abu Dhabi-backed investment group MGX has invested $2 billion in cryptocurrency investments in Binance, the companies said on Wednesday, deepening ties between the world's largest cryptocurrency exchange and the United Arab Emirates, UNN writes with reference to Reuters.

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The deal, which Binance called its first institutional investment, is one of the largest in the history of the crypto industry. It will allow MGX to become a minority shareholder after investing in a stablecoin - a type of cryptocurrency pegged to a fiat currency such as the dollar.

A Binance representative declined to comment on "agreed management rights" or the size of MGX's stake, or which stablecoin was used for the investment. MGX also declined to comment.

In a statement on Wednesday, Binance said it has a "significant presence" in the UAE, employing about 1,000 of its 5,000 employees.

The investment in Binance is MGX's first public foray into the cryptocurrency market, which was created almost exactly a year ago "to accelerate the development and adoption of AI and advanced technologies" through partnerships, as they said then.

The UAE is seeking to become a global hub for digital assets, including cryptocurrency, and is trying to attract some of the largest firms for local development as part of a plan to diversify its economy.

"MGX's investment in Binance reflects our commitment to advancing the transformative potential of blockchain for digital finance," Ahmed Yahya, managing director and CEO of MGX, said in a statement. Blockchain is the technology underlying cryptocurrencies.

MGX, which has also invested in OpenAI and Elon Musk's xAI, is headed by Sheikh Tahnoon bin Zayed Al Nahyan, UAE national security advisor and brother of UAE President Sheikh Mohammed bin Zayed. Abu Dhabi's $330 billion state wealth fund Mubadala is a partner of MGX.

In February, a U.S. federal judge agreed to postpone the U.S. Securities and Exchange Commission's civil lawsuit against Binance for 60 days.

Teng told Reuters in December that Binance is still looking for a base for its global headquarters, which is seen as an attempt to increase transparency after criminal charges against CZ and a $4.3 billion fine that Binance agreed to pay in 2023 in the United States.

In January, French investigators said they had launched a judicial investigation into money laundering, tax fraud and other charges against Binance, which said it rejected the charges.

"This MGX investment is an important milestone for the crypto industry and for Binance. Together, we are shaping the future of digital finance," Teng said.

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Binance, founded in 2017 in China by billionaire Changpeng Zhao, has grown into the world's largest cryptocurrency exchange, taking advantage of growing demand for trading in bitcoin and other cryptocurrencies.

Zhao, known as "CZ", pleaded guilty to violating U.S. anti-money laundering laws at Binance and spent several months in prison last year.

The exchange has been expanding its ties with the UAE under CZ's successor, Richard Teng, who previously headed the Abu Dhabi Financial Services Authority.

The crypto industry experienced a resurgence last year, a turning point after a series of crashes and scandals in 2022 that revealed widespread abuses and left investors with large losses. The largest cryptocurrency, bitcoin, reached new all-time highs after the election of Donald Trump as U.S. president, who took a pro-cryptocurrency stance.