Market News
Abu Dhabi-backed investor buys into Binance with $2 bln of crypto - REUTERS
By Elizabeth Howcroft and Federico Maccioni
Summary
- Abu Dhabi's MGX to become minority shareholder in Binance
- $2 bln investment was made in stablecoin, not dollars
- Binance deepens ties with Abu Dhabi
DUBAI, March 12 (Reuters) - Abu Dhabi-backed investment group MGX has made a $2 billion cryptocurrency investment in Binance, the companies said on Wednesday, deepening ties between the world's largest crypto exchange and the United Arab Emirates.
The deal, which Binance called its first institutional investment, is one of the largest ever in the crypto industry. It will see MGX become a minority shareholder after making the investment in stablecoin - a type of cryptocurrency pegged to a fiat currency such as the dollar.
A Binance spokesperson declined to comment on "the agreed governance rights" or the size of MGX's stake, or on which stablecoin was used for the investment.
MGX also declined to comment.
Binance, founded in 2017 in China by billionaire Changpeng Zhao, grew into the world's biggest crypto exchange after tapping into soaring demand for trading bitcoin and other cryptocurrencies.
Zhao, known as "CZ", pleaded guilty to violating U.S. laws against money laundering at Binance, and spent months in jail last year.
The exchange has been growing its links with the UAE under CZ's successor Richard Teng, who was previously head of Abu Dhabi's Financial Services Authority.
Binance said in Wednesday's announcement it had a "substantial footprint" in the UAE, employing around 1,000 of its 5,000 total staff there.
The investment in Binance is the first public foray into crypto by MGX, which was established almost exactly a year ago "to accelerate the development and adoption of AI and advanced technologies" through partnerships, it said at the time.
The UAE is aiming to become a global centre for digital assets including crypto and has been trying to attract some of the biggest firms to build locally as part of a plan to diversify its economy.
