Abu Dhabi’s state-owned investment company MGX is investing $2 billion in a minority stake in cryptocurrency exchange Binance. It is the first institutional investment in a cryptocurrency exchange and one of the largest in the cryptocurrency industry, AFP reported. The companies did not comment on the size of the stake.
MGX Makes Historic Crypto Investment Amid AI Expansion
The price will be paid in stablecoins, cryptocurrencies linked to real assets. The firms said it is the largest investment ever paid in cryptocurrencies. However, they did not specify in which stablecoin the transaction will take place or whether it has already been completed.
Investment firm MGX was founded last year, focusing on artificial intelligence (AI) technology. In September, it launched an AI fund worth more than $30 billion in partnership with companies such as BlackRock and Microsoft. It is also involved in Stargate, a major AI infrastructure project in the US, and a giant AI data centre to be built in France at a cost of up to €50bn. However, it has not yet invested in the cryptocurrency and blockchain sector.
Binance Expands in UAE Amid Legal Challenges
Binance is the largest cryptocurrency exchange in the world. Its founder Changpeng Zhao pleaded guilty last year to violating US anti-money laundering laws and Binance agreed to pay $4.3 billion to settle the charges. In January, France announced it had launched an investigation into the firm over allegations of failing to check customer funds. The exchange has been expanding its footprint in the Middle East, having faced regulatory hurdles in a number of areas in recent years. It says it has about 1,000 of its 5,000 employees in the United Arab Emirates.
As part of a plan to diversify its economy, the UAE is seeking to become a global hub for digital assets, including cryptocurrencies, and is trying to attract some of the biggest firms to the country. The cryptocurrency industry has been experiencing a resurgence in the past year after a series of crashes and scandals in 2022 that exposed widespread misconduct and left investors with large losses. The largest cryptocurrency, bitcoin, has soared to new records following the election of cryptocurrency-friendly US President Donald Trump.
Source: Reuters
