In a landmark move for the world’s largest cryptocurrency exchange, Binance announced on Wednesday that it has secured a substantial $2 billion investment from MGX, a state-backed investment firm based in the United Arab Emirates (UAE).
According to a Fortune report, the investment, made in stablecoins, grants MGX a minority stake in Binance, marking one of the largest capital injections into a crypto company in the sector’s history.
MGX’s Investment In Binance
While specifics regarding the valuation of the investment, the exact size of MGX’s stake, and the types of stablecoins involved were not disclosed, Binance’s CEO, Richard Teng, emphasized the significance of this deal for the crypto landscape. “This investment by MGX is a significant milestone for the crypto industry,” Teng stated in a press release.
MGX operates out of Abu Dhabi, the capital of the UAE, and is chaired by Sheikh Tahnoon Bin Zayed Al Nahyan, member of the Abu Dhabi royal family and a key figure in managing the UAE’s sovereign wealth fund.
The firm specializes in investments related to artificial intelligence (AI) and technology, reflecting a growing trend among institutional investors to enter the blockchain space.
Ahmed Yahia, managing director and CEO of MGX, highlighted the increasing demand for robust blockchain infrastructure, stating, “As institutional adoption accelerates, the need for secure, compliant, and scalable blockchain infrastructure and solutions has never been greater.”
BNB’s Value Creeps Closer To Reaching $600
Following the announcement of the investment, Binance’s native cryptocurrency, BNB, experienced a modest increase of approximately 1%, rising to $560, according to CoinGecko.
However, in the following hours, the token rallied by almost 5% to trade at $581, reaching the key resistance level of $600, which will be key in determining the metal’s next moves.
The UAE’s backing of Binance not only solidifies the exchange’s presence in the Gulf region but also underscores its strategic importance in the global cryptocurrency market. With around 1,000 employees based in the UAE out of a total workforce of 5,000, Binance has established a significant operational footprint in the region.
Interestingly, the company’s former CEO, Changpeng Zhao (CZ), has ties to the UAE, and Teng himself previously served as a regulator in Abu Dhabi.
Despite the challenges it has faced, including a recent $4.3 billion settlement with the Department of Justice in November 2023, which resulted in Zhao’s resignation and a plea for failing to maintain effective anti-money laundering practices, Binance is working to redefine its image.
Teng has committed to transforming the exchange from a perceived “crypto outlaw” to a compliant financial entity, emphasizing cooperation with regulators and law enforcement.
Featured image from DALL-E, chart from TradingView.com
