Binance welcomes $2 billion in institutional investment, with the backer being the second-in-command of Abu Dhabi

Author: Jaieel, BlockBeats

Three months have passed since the first rumors of Binance's acquisition emerged, and this global leader in cryptocurrency trading has announced its first institutional investment in history.

On March 12, 2024, Binance announced that it had secured a $2 billion investment from the Abu Dhabi-based investment firm MGX. This is not only a milestone in Binance's development history but also the largest institutional investment in the cryptocurrency industry to date. In the context of increasing global regulatory pressure and a sluggish market sentiment, this investment clearly sends a strong signal to the outside world—Binance remains a "hot commodity" in the eyes of global capital, especially in the Middle East.

According to information disclosed on MGX's official website, this Abu Dhabi investment firm was established in March 2024 and is affiliated with the Abu Dhabi Artificial Intelligence Council (AIATC), which was founded in January 2024 and focuses on promoting Abu Dhabi's development in artificial intelligence and advanced technology. The chairman of its board is Tahnoun bin Zayed Al Nahyan—a name that resonates throughout the UAE's business and political circles and even in global capital markets.

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

Binance's New Financial Backer: Abu Dhabi's Number Two, Tahnoun

Behind MGX's $2 billion investment is not just an emerging investment company, but more importantly, its actual leader—Tahnoun bin Zayed Al Nahyan. As a core member of the Abu Dhabi royal family, Tahnoun's identity is far more than just "wealthy beyond measure."

Tahnoun's official title is UAE National Security Advisor and Deputy Ruler of Abu Dhabi, but his influence in the UAE far exceeds that of a mere deputy. He not only oversees the UAE's intelligence and security affairs but also controls the country's economic lifeline—multiple sovereign wealth funds that collectively manage assets totaling up to $15 trillion, making him a top player in global capital markets.

If Abu Dhabi is the heart of the UAE, then Tahnoun is the mastermind controlling the heartbeat. His business empire spans multiple sectors, from artificial intelligence to finance, from sovereign wealth funds to cryptocurrency, covering nearly all cutting-edge industries globally.

Tahnoun's Business Empire: A Triple Play in AI, Finance, and Cryptocurrency

Through various investment groups, Tahnoun has built a vast business landscape that spans AI, finance, energy, mining, and cryptocurrency, continuously expanding globally. Here are some of the core enterprises and institutions under his control:

1. G42: The UAE's AI Giant

G42 is the largest and most important artificial intelligence company in the UAE, known to many as the "King of the UAE Internet," and also referred to as the "Alibaba + Tencent of the Middle East." Established in 2018, its business covers multiple fields including biotechnology, cloud computing, data analytics, and cybersecurity. In recent years, G42 has made significant inroads into global markets, partnering with tech giants like Microsoft and OpenAI, and even announced plans in early 2024 to invest in OpenAI's chip manufacturing project, aiming to create the UAE's own AI ecosystem.

The management team at G42 includes several prominent figures from the Chinese community, such as G42 CEO Xiao Peng (formerly Senior Executive Vice President of MicroStrategy) and Cong Hongbin, CEO of G42's biopharmaceutical company Hayat Biotech. G42 also has numerous business dealings with Chinese companies. Its G42 Expansion Fund (referred to as the 42X Fund) has an office in Shanghai and has recruited Chinese national Hu Ningfeng to scout potential unicorns in China.

2. ADQ: The UAE's Sovereign Wealth Fund

Abu Dhabi Development Holding Company (ADQ) is one of the three major sovereign wealth funds in the UAE, primarily investing in infrastructure, energy, healthcare, and advanced technology. Tahnoun took over ADQ in 2023, further consolidating his control over UAE sovereign wealth and accelerating Abu Dhabi's expansion in international capital markets.

3. IHC: An Investment Giant Across Multiple Industries

International Holding Company (IHC) is one of the most influential holding companies in the UAE, with investments spanning minerals, real estate, fintech, agriculture, aerospace, and renewable energy. In recent years, IHC has performed impressively in global capital markets, with its market value rapidly climbing, making it one of the most significant investment groups in the Middle East. IHC has invested in the first Crypto-listed company in the Middle East, Phoenix, whose core business is the world's largest Bitcoin mining operation, Phoenix Miner, which holds 7% of the global Bitcoin network's hash rate.

4. First Abu Dhabi Bank (FAB): The UAE's Largest Bank

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

The Battle for the Throne: The Crown Prince Dream of the "Number Two" Suppressed

Tahnoun is not only a top capital player but also a politically ambitious strategist. There was a time when he was almost the Crown Prince of Abu Dhabi, but ultimately, he did not achieve that goal.

The traditional practice of the UAE royal family is "brother succeeds brother," meaning that after Tahnoun's brother, the current UAE President MBZ, succeeded their elder brother to the throne in 2022, Tahnoun and his brothers theoretically had the opportunity to inherit the throne as the president's younger siblings. With his immense influence in finance, technology, and defense, Tahnoun was seen as the most likely candidate to inherit the crown prince position.

However, current UAE President MBZ decided to break the "brother succeeds brother" tradition and directly appointed his son Khalid as the Crown Prince, ensuring that power would not fall into the hands of his brothers. The position of Crown Prince became the focal point of a power struggle, leading to a series of internal competitions within the royal family.

Unwilling to accept this, Tahnoun spent a long time trying to persuade MBZ to change his decision, even providing evidence that this arrangement contradicted their father (the founding father of the UAE)'s wishes. But the reality was that he could not shake MBZ's decision.

Faced with his brother's stubbornness, Tahnoun made a shrewd deal: he exchanged control of his financial empire for a compromise on the throne. As compensation, MBZ appointed him as the chairman of the Abu Dhabi Investment Authority (ADIA), allowing him to manage assets totaling up to $15 trillion.

This has allowed Tahnoun's economic influence to even surpass that of his nephew Crown Prince Khalid. Since then, Tahnoun's power has grown stronger, extending beyond finance to become the behind-the-scenes operator of the UAE's intelligence and security system.

He directly controls G42, the UAE's intelligence agency, and several cybersecurity entities, and is considered a key figure in the UAE's global espionage network. He orchestrated and executed Project Raven, a massive surveillance program targeting political dissidents, which sparked a huge uproar after being exposed by Western media. His cybersecurity operations even extend globally, including secret intelligence dealings with the United States, Israel, and Iran.

Within G42, employees even refer to Tahnoun as "the Tiger." According to a former engineer, "the Tiger" once ordered the team to either build a company with annual revenues of $100 million or create a technology that would make him famous. G42 has also already stepped into the realm of security states, with most of the company's technologies and data centers located in Zayed Military City, a restricted area where all G42 employees must pass security clearance to be hired.

The Beginning of Abu Dhabi's Cryptocurrency Hegemony: Binance's New Sanctuary?

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

According to insiders, Binance has long been deeply engaged in the UAE market, employing about 1,000 people and establishing offices in Abu Dhabi and Dubai, with team members expressing recognition of the UAE's cryptocurrency regulatory environment. Although Binance has deliberately avoided establishing a formal headquarters, its relationship with the UAE has long been extraordinary. Now, with MGX's $2 billion investment, Binance has been pushed from being an "entrant" to a part of Abu Dhabi's capital strategic landscape, finding a crucial financial and legal safe haven amid global regulatory storms.

This investment from MGX means that Binance is not just an entrant in the UAE but has become part of the UAE's capital strategic layout. This gives Binance a vital financial and legal refuge in the global market.

The UAE has long maintained an open attitude toward cryptocurrencies and actively attracts global blockchain companies, becoming one of the most attractive cryptocurrency regulatory regions in the world. The Dubai Virtual Assets Regulatory Authority (VARA) and the Abu Dhabi Global Market (ADGM) provide clear legal frameworks for cryptocurrency companies, making the UAE undoubtedly a more ideal landing spot compared to the regulatory barriers in Europe and the United States: more flexible than Singapore, offering substantial financial incentives; more independent than Hong Kong, unaffected by Chinese policies, attracting a large number of Web3 companies; and amid tightening regulations in Europe and the United States, many cryptocurrency companies have chosen to relocate to Dubai and Abu Dhabi.

For Binance, this is not just capital support; it also signifies a shift in its positioning in the global market. As regulations tighten in Europe and the United States, the Middle East, especially the UAE, is gradually becoming a new center for the global cryptocurrency industry.

The relationship between Binance and UAE capital did not emerge suddenly. As early as November 2022, Zhao Changpeng (CZ) and his executive team were reported to have secretly met with investors in Abu Dhabi, hoping to raise funds to establish a cryptocurrency industry recovery fund to support projects facing liquidity crises at that time. According to insiders, the financial entities he sought funding from were precisely those under Tahnoun's control.

However, after the media reported this news, CZ quickly denied on social media that Binance had raised funds in Abu Dhabi, briefly responding that the report was "False."

A spokesperson for Binance also stated that CZ's meeting in Abu Dhabi focused on discussing the global regulatory framework, particularly how the Middle East could establish stricter cryptocurrency custody requirements globally, rather than merely fundraising.

Regardless of how Binance clarifies, Tahnoun's capital ultimately arrived. This $2 billion investment from MGX is not just a financial lifeline but also a formal recognition of Binance's importance in the global cryptocurrency market by Abu Dhabi capital.

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

In November 2023, Binance reached a $4.3 billion settlement agreement with the U.S. Department of Justice to resolve allegations of violating anti-money laundering regulations. As part of the agreement, CZ resigned as CEO, admitting that Binance had failed to effectively implement compliance measures and ultimately served less than four months in prison.

After CZ's departure, Richard Teng took over with a clear mission—to transform Binance from an "industry rebel" into the "good child" of the traditional financial world.

After Richard Teng took office, Binance began to vigorously promote its compliance process, strengthening communication with regulatory agencies in various countries and striving to shed its image as "marginalized in the cryptocurrency industry."

Notably, Teng was formerly an official at the Abu Dhabi Financial Regulatory Authority, and his background has tightened the relationship between Binance and the UAE regulatory authorities, making MGX's investment seem like a natural capital collaboration.

For Binance, this investment also means it can break free from the dollar-dominated global financial system, leveraging Middle Eastern capital and regulatory frameworks to reshape its image 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 profound financial game. Currently, the speculated equity structure is that before the sale of shares, CZ's stake was rumored to be 90%, and MGX is likely the second-largest shareholder.

Abu Dhabi is attempting to position itself as a global cryptocurrency financial center, while Binance hopes to seize this opportunity to break free from the constraints of Western regulations and find a new global positioning.

Under Tahnoun's control, UAE capital has already established a massive influence in the fields of artificial intelligence, sovereign wealth, and fintech, and cryptocurrency may be the next piece to be integrated. MGX is just one of Tahnoun's capital machines, and Binance is merely another important piece on this financial chessboard.

So, will Binance establish a formal headquarters in the UAE? Will Abu Dhabi become the new center of the global cryptocurrency industry? How will Tahnoun's financial empire continue to expand? All of this may just be the beginning.