Abu Dhabi-based MGX made a major move into crypto last week, acquiring a minority stake in Binance for $2 billion. While it was the first deal by an AI fund in the sector, the oil-rich UAE capital is quietly paving the way, reported by Bloomberg.
Mubadala, one of the city’s three main investment funds and MGX’s sponsor, announced a position in BlackRock’s iShares Bitcoin Trust exchange-traded fund last month — one of its biggest new purchases in the last quarter of 2024. And in January, another investment fund, ADQ, invested $16 million in a company that helps large companies build and integrate crypto wallets into their operations and applications.
MGX and Binance
The MGX deal is Abu Dhabi’s most eye-catching effort yet. This is Binance’s first institutional investment and the largest ever for a crypto company that has managed to maintain its leadership in the sector even as it has battled U.S. regulators over the past few years. Separately, Binance has discussed doing business with World Liberty Financial, one of the Trump family’s crypto businesses.
“There has been a lot of momentum in the region, and a lot of that is due to Abu Dhabi and the UAE being the first to introduce a crypto-friendly regulatory framework,” BitOasis CEO and co-founder Ola Dudin told Bloomberg. “The deal is confirmation that institutional adoption of crypto and Web3 is happening; it reduces the risks for the industry and will help it scale.”
Cryptocurrency promotion policy
In the years since the pandemic, some of the world’s largest crypto companies have flocked to the UAE, lured by crypto-friendly policies. But it also meant that moments of industry turmoil, such as the FTX collapse, were particularly hard-hit in the country, prompting a debate about whether the move was too nimble. “There was a lot of opportunity and value created, but there were probably some mistakes and risks,” Dudin said. For Binance, the deal further cements its ties to the country — a fifth of its 5,000 employees are based in the UAE, and Richard Teng, who succeeds co-founder Changpeng Zhao as CEO, previously headed the Abu Dhabi Financial Services Authority.
With the investment, Binance MGX said it aims to drive innovation at the intersection of AI, blockchain and finance. The firm has been heavily involved in recent funding rounds for prominent AI companies including OpenAI, Elon Musk’s xAI and Databricks. It is also helping to finance Donald Trump’s Stargate venture and is ramping up its US operations with hires from firms like Apollo and Warburg Pincus. There is plenty of capital – Abu Dhabi is making bold moves in AI, and now we are seeing it in cryptocurrency.