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Abu Dhabi’s MGX is ploughing $2bn into Binance in one of the digital asset industry’s largest-ever deals and the first institutional investment into the world’s biggest cryptocurrency exchange.
The minority stake would be paid for in stablecoins, Binance and MGX said on Wednesday, although they declined to identify which they would use. Stablecoins are a type of digital cash, designed to hold a constant value per coin and are typically pegged to a sovereign currency like the dollar.
Oil-rich Abu Dhabi opened the artificial intelligence-focused MGX fund last year to fuel its ambitions to use AI to diversify its economy. In September it partnered with asset manager BlackRock and Microsoft to launch a more than $30bn AI fund. MGX is chaired by the UAE’s powerful national security adviser Sheikh Tahnoon bin Zayed al-Nahyan, who is spearheading the Gulf state’s AI efforts.
MGX had not previously expressed interest in the cryptocurrency industry and blockchain technology, but in a statement said it “aims to enable innovation at the intersection of AI, blockchain technology and finance”.
Binance and MGX declined to comment on the size of the stake, and Binance declined to comment on whether the deal had been completed.
The exchange, which typically handles deals with a nominal value of $20bn a day, has made the UAE one of its main bases as it seeks to rebuild its reputation.
In 2023 it took a record $4.3bn fine as part of a settlement with US authorities for failing to protect against money laundering and breaching international financial sanctions, including failing to stop transactions that funded al-Qaeda and entities under sanctions in Iran and Russia.
Binance employs about 1,000 people in the UAE and has a licence to operate in the region from Dubai’s crypto watchdog. Richard Teng, Binance’s chief executive, previously headed the financial regulator of financial centre Abu Dhabi Global Market and is based in the country.
The deal comes as Donald Trump’s return to the White House has propelled crypto prices to record highs, after he became an enthusiastic backer of the industry, including launching his own crypto projects.
Abu Dhabi is also positioning itself as a hub for crypto innovation and has created crypto regulations in an effort to encourage international companies to set up there.
The majority stake in Binance is still held by founder Changpeng Zhao, who stepped down as chief executive after the US settlement, and spent four months in a US prison after pleading guilty to failing to establish adequate money-laundering controls.
https://www.ft.com/content/f02c59cb-a7e6-4ce2-9091-cd844d60d000
