Abu Dhabi-based investment firm MGX is investing a staggering $2Bn in crypto exchange Binance, marking the first institutional backing of the world’s largest crypto exchange. It is also the largest-ever investment transaction conducted entirely in stablecoins, MGX gaining a sizeable minority stake in the crypto exchange.
Founded last year by Mubadala (the sovereign wealth fund) and G42 (the Abu Dhabi-based AI company) with a focus on AI and other emerging tech, MGX has previously partnered with firms such as BlackRock and Microsoft for a $30 billion AI infrastructure fund. So far, it has invested in the likes of AI upstart Anthropic, the Stargate Project, and Khazna Data Centers. It has also previously partnered with industry giants like BlackRock and Microsoft for a $30 billion AI infrastructure fund, and this current investment marks its first major foray into the cryptocurrency sector as well.
“MGX’s investment in Binance reflects our commitment to advancing blockchain’s transformative potential for digital finance. As institutional adoption accelerates, the need for secure, compliant, and scalable blockchain infrastructure and solutions has never been greater. Binance has long been a driving force in cryptocurrency innovation, from exchange technology and tokenization to staking and payments. Together, we are committed to building a more inclusive and robust digital finance ecosystem,” Ahmed Yahia, Managing Director and CEO of MGX, announced in an official blog post. It remains to be seen whether MGX’s backing can encourage more institutional investors to explore opportunities in digital assets, particularly those who have been hesitant due to regulatory uncertainties.
For its part, Binance remains the leading crypto exchange in the world in terms of trading volume (over $651.5 billion in spot trading volume, according to a report by The Block, and processes over $20 billion in transactions on a daily basis). Over the past years, it has managed to expand its presence in the Middle East, particularly in the UAE. Currently, a major chunk of its global workforce (5000 strong overall) is employed in the region (around 1000, making one-fifth of the global workforce), and today, has made a name for itself as a leader in global crypto trading, boasting 260 million registered users and over $100 trillion in cumulative trading volume. The investment from MGX provides Binance with additional financial backing, as well as strengthens its relationship with Abu Dhabi’s growing technology sector.
There have been obstacles in its path, of course, and Binance has faced its fair share of regulatory hurdles. Despite facing legal challenges from US regulators, Binance has maintained its dominant market position. The exchange recently settled with the US Department of Justice and the Commodity Futures Trading Commission, agreeing to pay $4.3 billion in financial penalties. The settlement, while costly, allowed Binance to put some of its legal troubles behind and focus on expanding its services in more favorable jurisdictions. Former CEO Changpeng Zhao (CZ) stepped down as part of the settlement.
