Abu Dhabi's MGX makes record $2bn investment in Binance

Deal marks largest sum paid using a stablecoin, companies say

Binance has more than 260 million registered users and more than $100 trillion in cumulative trading volume globally. Reuters

Abu Dhabi-based technology investment company MGX is to invest $2 billion in Binance, marking the first institutional investment in the world’s largest cryptocurrency exchange.

MGX has acquired a minority stake in Binance, with the deal the “single largest investment into a crypto company and the largest investment ever paid in crypto (stablecoin)”, the companies said on Thursday.

The investment marks MGX's entry into the cryptocurrency and blockchain sectors and is aimed at boosting the adoption of digital assets.

“MGX’s investment in Binance reflects our commitment to advancing blockchain’s transformative potential for digital finance,” Ahmed Yahia, managing director and chief executive of MGX, said.

“As institutional adoption accelerates, the need for secure, compliant, and scalable blockchain infrastructure and solutions has never been greater. Together, we are committed to building a more inclusive and robust digital finance ecosystem.”

The UAE is taking steps to boost the adoption of digital assets and has launched several initiatives to support the sector.

Abu Dhabi's ADGM has attracted global cryptocurrency players such as eToro and M2, allowing these companies to operate as a brokers for securities, derivatives and crypto assets, and platforms for institutional and retail investors to buy, sell and hold custody of virtual assets.

Dubai also adopted a law in 2022 to regulate virtual assets to support investors and streamline the offerings from exchanges. The emirate also set up Vara under the Dubai Virtual Asset Regulation Law, to create an advanced legal framework to protect investors, provide international standards for the virtual asset industry management and enable responsible business growth.

The UAE Central Bank also issued a regulation on stablecoins in June that will only allow businesses and sellers in the Emirates to accept cryptocurrencies for goods and services if they are dirham-backed stablecoins.

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Crypto activity in the UAE, which is the Mena region's third-largest crypto economy, is also growing across all transaction size brackets, signalling a more balanced adoption landscape, blockchain company Chainalysis said in a report in September.

Large institutional (more than $10 million), institutional ($1 million to $10 million), and professional ($10,000 to $1 million) sized crypto transfers in the UAE between July 2023 and June last year posted annual growth of 20.13 per cent, 55.07 per cent and 46.3 per cent, respectively, it said.

Binance has more than 260 million registered users and more than $100 trillion in cumulative trading volume globally. It also has a substantial footprint in the UAE, employing about 1,000 of its 5,000 global workforce in the country.

The company's chief executive Richard Teng also previously served as the chief executive of the Abu Dhabi Financial Services Authority. He joined the entity in 2015 and helped shape frameworks for crypto and blockchain adoption in the UAE.

“Binance remains committed to working with regulators worldwide to establish transparent, responsible and forward-thinking policies for the crypto industry,” Mr Teng said.

“Our ongoing investments in security and compliance reinforce our mission to foster a secure and trusted digital financial ecosystem.”

Established in March last year, MGX aims to help the development of artificial intelligence and other advanced technology. It focuses on three core areas – AI infrastructure (data centres and connectivity), semiconductors and core technology, and applications such as AI models, software, data, life sciences and robotics.

Abu Dhabi's sovereign fund Mubadala Investment Company and AI and cloud computing firm G42 are partners.

In September, MGX also teamed up with BlackRock, Microsoft and Global Infrastructure Partners to launch an AI infrastructure investment partnership that aims to gather up to $100 billion.

Initially, the Global AI Infrastructure Investment Partnership plans to secure $30 billion in private equity from investors, asset owners and companies, which will grow to $100 billion in total investment with the inclusion of debt financing, the companies said at the time.