MGX, an investment organisation supported by Abu Dhabi, on Wednesday announced an investment of $2 billion in Binance, strengthening the relationship between the UAE and the biggest cryptocurrency exchange in the world.
The transaction is among the biggest in the history of the cryptocurrency sector and was dubbed Binance’s first institutional investment.
With this investment, MGX has strengthened its strategic relationship with Binance, a company with over 260 million registered users and a trade volume of over $100 trillion.
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MGX becomes minority stakeholder
The investment in stablecoin, a kind of cryptocurrency linked to a fiat currency like the dollar, will result in MGX becoming a minority shareholder.
Binance is well-established in the United Arab Emirates, a country renowned for its innovative attitude to digital assets and clear regulations.
With over 1,000 of its 5,000 employees working in the UAE, Binance claimed to have a “substantial footprint” in the country in its announcement on Wednesday.
What the CEOs of MGX and Binance said
MGX’s CEO Ahmad Yahya stressed the need for a safe blockchain infrastructure that conforms with global standards, adding that the company plans to invest in AI-based innovation to help digital economies grow in the future.
Ahmed Yahia, underlined the significance of safe and legal blockchain infrastructure, saying, “Institutional adoption of digital finance is accelerating. Binance has led innovation in exchange technology, tokenization, staking, and payments. Together, we are committed to building a more inclusive and robust digital finance ecosystem.”
According to Binance CEO Richard Teng, this collaboration will strengthen blockchain’s place in the digital economy’s future while fully adhering to international regulatory standards.
Richard Teng described the investment as a turning point for the cryptocurrency sector stating, “This partnership will shape the future of digital finance. Binance remains committed to compliance, security, and fostering a transparent regulatory framework for the crypto industry worldwide.”
Binance’s plans for MGX’s $2 billion investment
In addition to continuing to collaborate with authorities around the globe to promote accountable and transparent regulations for the digital asset market, the exchange plans to utilise the funds to improve user protections, security protocols, and compliance.
According to MGX, there is a rising need for scalable and secure blockchain infrastructure as institutional use rises. The company wants to help the tokenised digital economy grow by promoting developments in blockchain technology and decentralised finance (DeFi).
In light of these events, Binance declared that it will continue to prioritise ecosystem expansion, user safety, and regulatory compliance.
MGX’s first public entry in cryptocurrency
The investment in Binance marks MGX’s first public entry into the cryptocurrency space.
The company was founded over a year ago with the goal of “accelerating the development and adoption of AI and advanced technologies” through partnerships, according to its statement at the time.
This transaction occurs at a time when the cryptocurrency industry is expanding rapidly in spite of regulatory obstacles, demonstrating investors’ continued interest in blockchain-related financial advances.
The investment positions MGX as a major participant in the institutional deployment of next-generation financial infrastructure and reaffirms its leadership in blockchain innovation powered by AI.
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Binance’s founder legal battle
The billionaire Changpeng Zhao created Binance in China in 2017, and it quickly became the largest cryptocurrency exchange in the world by capitalising on the growing demand for trading bitcoin and other cryptocurrencies.
After spending months in jail last year, Zhao, also known as “CZ,” entered a guilty plea to breaking U.S. money laundering rules at Binance.
Under CZ’s successor Richard Teng, the former chairman of Abu Dhabi’s Financial Services Authority, the exchange has been strengthening its ties with the United Arab Emirates.