Binance welcomes US$2 billion in institutional investment, and the funder behind it is actually the No. 2 figure in Abu Dhabi

Author: Jaieel, BlockBeats

Just the third month after Binance's first acquisition rumors broke out, the world's largest cryptocurrency transaction announced its first institutional investment in history.

On March 12, 2024, Binance announced that it had received a US$2 billion investment from MGX, an investment institution based in Abu Dhabi. This is not only a milestone in Binance's development history, but also the largest institutional investment in the crypto industry to date . Against the backdrop of intensified global regulatory pressure and sluggish market sentiment, this investment obviously sent a strong signal to the outside world

• Binance is still a "hot commodity" in the eyes of global capital , especially in the Middle East.

According to the official MGX website, this Abu Dhabi investment institution was established in March 2024 and is affiliated to the Abu Dhabi Artificial Intelligence Commission (AIATC), which was established in January 2024 to focus on promoting the development of Abu Dhabi in the fields of artificial intelligence and advanced technologies. It is Tahnoun bin Zayed Al Nahyan , the name that is well-known in the UAE business, politics and even global capital markets.

MGX mainly invests in artificial intelligence, data technology, semiconductors and advanced computing technology, and this investment in Binance marks its official entry into the cryptocurrency and blockchain fields. In other words, this is not just a deal, but a strategic bet by Abu Dhabi Capital on the future of digital assets.

Binance's new funder: Abu Dhabi's No. 2 person Tahnoun

Behind MGX’s $2 billion, it is not just an emerging investment company, but more importantly, its actual helm – Tahnoun bin Zayed Al Nahyan. As a core member of the Abu Dhabi royal family, Tahnoun's identity is much more than "wealthy can rival a country."

Tahnoun is officially the UAE National Security Advisor and Deputy Chief of Abu Dhabi , but his influence in the UAE is far beyond the authority a deputy should have. Not only is he in charge of the UAE's intelligence and security affairs, he also dominates the country's economic lifeline - several sovereign wealth funds, with a total asset management of up to US$1.5 trillion, and is a top player in the global capital market.

If Abu Dhabi is the heart of the UAE, then Tahnoun is the brain behind the beating of this heart. His business empire spans a variety of fields, from artificial intelligence to finance, from sovereign wealth funds to cryptocurrencies, covering almost the most cutting-edge industries in the world.

Tahnoun’s business empire: AI, finance, and cryptocurrency

Through multiple investment groups, Tahnoun has created a huge business landscape across AI, finance, energy, mining and cryptocurrencies and is expanding around the world. Here are several core enterprises and institutions he controls:

1. G42: UAE 's AI giant

G42 is the largest and most important artificial intelligence company in the UAE. Those who know it call it " the number one Internet leader in the UAE" and is also known as " Middle East Alibaba + Tencent" . Founded in 2018, it covers multiple fields such as biotechnology, cloud computing, data analysis and network security. In recent years, G42 has conquered the global market and has successively reached cooperation with technology giants such as Microsoft and OpenAI . It was even rumored to have planned to invest in OpenAI's chip manufacturing project in early 2024, trying to build the UAE's own AI ecosystem.

There are many Chinese people in the G42 management, such as G42 CEO Xiao Peng ( who once served as senior executive vice president of MicroStrategy MicroStrategy ), Cong Hongbin, CEO of Hayat Biotech, a biopharmaceutical company under G42. G42 also has a lot of business dealings with Chinese companies. The G42 Expansion Fund (42X Fund) it established has an office in Shanghai and recruited Chinese Hu Ningfeng to recruit potential Chinese unicorns for it.

2. ADQ: UAE’s sovereign wealth fund

Abu Dhabi Development Holdings (ADQ) is one of the three major sovereign wealth funds in the UAE, mainly investing in infrastructure, energy, healthcare and advanced technologies . Tahnoun’s takeover of ADQ in 2023 further consolidated control of the UAE’s sovereign wealth and accelerated Abu Dhabi’s expansion in the international capital market.

3. IHC: Investment giants spanning multiple industries

International Holding Company (IHC) is one of the most influential holding companies in the UAE, with investments covering minerals, real estate, fintech, agriculture, aerospace and renewable energy . In recent years, IHC has performed well in the global capital market, with a rapid market value, and has become one of the most substantial investment groups in the Middle East. IHC has invested in Phoenix, the first Crypto listed company in the Middle East. Its core business is Phoenix Miner, the world's largest Bitcoin mining farm, and has 7% of the computing power of the global Bitcoin network.

4. First Abu Dhabi Bank (FAB): The largest bank in the UAE

Tahnoun is also the helm of Abu Dhabi First Bank (FAB), which is not only the largest commercial bank in the UAE, but also plays a financial hub in the Middle East and North Africa (MENA). In recent years, FAB has also begun to enter the digital finance and blockchain sectors , paving the way for the UAE to further integrate into the global cryptocurrency market.

Battle for the Throne: "Second Commander"'s Dream of Crown Prince

Tahnoun is not only a top capital player, but also a political trader with deep ambitions. Once upon a time, he almost became the crown prince of Abu Dhabi , but ultimately failed to do so.

The tradition of the UAE royal family is usually "brothers and brothers", which means that in 2022, Tahnoun's older brother, incumbent UAE President MBZ, has theoretically had the opportunity to inherit the throne as the president's younger brother after he took over the throne of their elder brother. With his huge influence in finance, technology, national defense and other fields, Tahnoun is regarded as the most likely candidate to inherit the position of crown prince.

But the current UAE President MBZ decided to break the tradition of "brothers and brothers" and directly designate his son Khalid as the crown prince to ensure that the inheritance of power does not fall into the hands of his brothers. The position of the crown prince became the focus of power struggle, and a series of power competitions began within the royal family.

The unwilling Tahnoun spent a long time trying to lobby MBZ for a change of decisions, even providing evidence that the arrangement was against the will of their father (the father of the UAE). But the reality is that he can't shake MBZ's decision.

Facing his brother's stubbornness, Tahnoun made a smart deal: to trade control of the financial empire in exchange for compromise on the throne . In compensation, MBZ appointed him as chairman of the Abu Dhabi Investment Authority (ADIA), allowing him to manage up to $1.5 trillion in assets.

This allowed Tahnoun 's economic influence to surpass even his nephew Crown Prince Khalid. Since then, Tahnoun's power has grown more and more, not just finance, but has become the behind-the-scenes trader of the UAE's intelligence and security system.

He directly controls G42, UAE intelligence agencies and multiple cybersecurity entities , and is considered to be the core figure of the UAE global spy network . He planned and implemented Project Raven, a large-scale surveillance program for political dissidents , which caused an uproar after being exposed by Western media. His cybersecurity layout even touched the world, including secret intelligence transactions with the United States, Israel and Iran .

Within the G42, employees even called Tahnoun a "tiger" . According to a former engineer, Tiger once ordered the team to either build a business with an annual revenue of $100 million or create a technology that made him famous . The G42 conglomerate has also stepped into a safe country with one foot, with most of the company's technology and data centers located in the Zayed Military City, an area of ​​restricted access, and all G42 employees need to pass a security permit to be hired.

The beginning of crypto hegemony in Abu Dhabi, a new shelter for Binance?

This is not the first "marriage" between Binance and Abu Dhabi.

Binance has long been deeply involved in the UAE with about 1,000 employees and has set up offices in Abu Dhabi and Dubai, and team members have expressed recognition of the UAE's crypto-regulatory environment, according to people familiar with the matter. Although Binance has been deliberately avoiding the establishment of a formal headquarters, its relationship with the UAE has long been extraordinary. Today, MGX's $2 billion investment is a part of the UAE's capital strategic map, allowing it to find a key financial and legal haven under the global regulatory storm.

This investment in MGX means that Binance is not only a company that has settled in the UAE, but also a part of the UAE capital strategic layout. This gives Binance a crucial financial and legal haven in the global market.

The UAE has long been open to cryptocurrencies and actively attracts global blockchain companies to settle in, and has become one of the most attractive cryptocurrency regulatory regions in the world. Dubai Virtual Assets Regulatory Authority (VARA) and Abu Dhabi Global Market (ADGM) both provide a clear legal framework for crypto companies. Compared with regulatory barriers in the European and American markets, the UAE is undoubtedly a more ideal ending point: it is more flexible than Singapore and provides a large amount of fiscal incentives; it is more independent than Hong Kong, and is not affected by Chinese policies, attracting a large number of Web3 companies; in the previous situation of stricter regulation in Europe and the United States, many crypto companies have chosen to relocate to Dubai and Abu Dhabi.

For Binance, this is not just capital support, but also means that its positioning in the global market is changing. As European and American regulations become stricter, the Middle East, especially the UAE, is gradually becoming a new center of the global crypto industry.

Binance's relationship with UAE capital was not sudden. As early as November 2022, Changpeng Zhao (CZ) and his executive team were exposed to secretly meeting investors in Abu Dhabi, hoping to raise funds to establish a Recovery Fund to support projects that were facing liquidity crisis at the time. According to people familiar with the matter, the target he was seeking financial support at that time was Tahnoun's financial entity.

However, after the media revealed the news, CZ quickly denied on social media that Binance had raised funds in Abu Dhabi, and only briefly responded that the report was "False (completely false).

A Binance spokesman also said that the focus of the CZ meeting in Abu Dhabi is to discuss the global regulatory framework, especially how the Middle East can establish stricter cryptocurrency custody requirements around the world rather than simply raising funds.

No matter how Binance clarified, Tahnoun’s capital came eventually. This US$2 billion investment by MGX is not only a capital transfusion, but also a formal recognition of Abu Dhabi Capital's importance to Binance in the global crypto market.

For Binance, MGX's investment not only brought financial support, but also changed its market narrative.

In November 2023, Binance reached a $4.3 billion settlement with the U.S. Department of Justice to resolve alleged violations of anti-money laundering regulations. As part of the agreement, CZ resigned as CEO, acknowledged Binance failed to effectively enforce compliance measures and eventually served less than four months in prison.

After CZ left the court, Richard Teng, who took over him, had a clear task -to turn Binance from an "industry rebel" to a "good kid" in the traditional financial world.

After Richard Teng took office, Binance began to vigorously promote the compliance process, strengthen communication with regulators in various countries, and strive to get rid of the image of "marginalization of the crypto industry."

It is worth noting that Teng was an official of the Financial Regulatory Bureau of Abu Dhabi. His background made Binance closer to the UAE regulator, and MGX 's investment was more like a natural capital cooperation.

For Binance, this investment means it can get rid of the global financial system dominated by the US dollar, reshape its image with the help of the Middle East capital and regulatory system, and further expand its global market.

This is Binance’s new identity and Abu Dhabi’s new ambition.

MGX's $2 billion investment in Binance is not a simple business transaction, but a far-reaching financial game. At present, the speculative equity structure is: CZ 's share was said to be 90% before the sale of equity, and MGX is currently the second largest shareholder.

Abu Dhabi is trying to shape itself into a global crypto-financial center, and Binance also hopes to take advantage of this opportunity to break free from the shackles of European and American regulations and find a new global position.

Under Tahnoun's control, UAE capital has established huge influence in the fields of artificial intelligence, sovereign wealth, and financial technology, and cryptocurrencies may become the next pawn to be included. MGX is just one of Tahnoun’s capital machines, and Binance is just another important piece in this financial chess game.

So, will Binance establish its official headquarters in the UAE? Will Abu Dhabi become a new hub for the global cryptocurrency industry? How will Tahnoun's financial empire continue to expand? All this may have just begun.