Exactly three months after the first report of Binance's acquisition rumor, the world's largest cryptocurrency exchange announced its first-ever institutional investment.

On March 12, 2024, Binance revealed that it had received a $20 billion investment from the Abu Dhabi-based investment firm MGX. This not only marked a milestone in Binance's development history but also stood as the largest institutional investment in the crypto industry to date. Against the backdrop of increasing global regulatory pressure and subdued market sentiment, this investment clearly sent a strong signal to the outside world — Binance remains a sought-after asset in the eyes of global capital, especially in the Middle East.

According to the official MGX website, this Abu Dhabi investment firm was established in March 2024 and is part of the Abu Dhabi Artificial Intelligence and Technology Council (AIATC), founded in January 2024 with a focus on advancing Abu Dhabi's initiatives in AI and advanced technologies. Heading its board of directors is Tahnoun bin Zayed Al Nahyan — a name well-known in the UAE's business, political, and global capital markets.

MGX primarily invests in AI, data technology, semiconductors, and advanced computing, and this investment in Binance signifies its formal entry into the cryptocurrency and blockchain field. In other words, this is not just a transaction but Abu Dhabi's strategic bet on the future of digital assets.

Binance's New Major Shareholder: Abu Dhabi's Second-in-Command, Tahnoun

Behind MGX's $20 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 status goes far beyond being merely "wealthy."

Tahnoun's official title is UAE National Security Advisor and Abu Dhabi Deputy Prime Minister, but his influence in the UAE far exceeds that of a deputy. He not only oversees the UAE's intelligence and security affairs but also controls the country's economic lifeline — several sovereign wealth funds, collectively managing assets of up to $1.5 trillion, making him a major player in the global capital markets.

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

Tahnoun's Business Empire: A Triumvirate of AI, Finance, and Cryptocurrency

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

1. G42: UAE's AI Giant

G42 is the UAE's largest and most significant artificial intelligence company, known as the "UAE's Internet Big Brother," and also referred to as "the Middle East's Alibaba + Tencent." Established in 2018, its business covers various fields such as biotech, cloud computing, data analytics, and cybersecurity. In recent years, G42 has been expanding its presence in the global market, having formed partnerships with tech giants such as Microsoft, OpenAI, and even reportedly planning to invest in OpenAI's chip manufacturing project in early 2024, aiming to build the UAE's AI ecosystem.

The G42 management team includes prominent Chinese figures, such as G42 CEO Shawn Pang (formerly Senior EVP at MicroStrategy) and Hayat Biotech CEO Hongbin Cong. G42 also has significant business dealings with Chinese firms. Its establishment, the G42 Expansion Fund (known as the 42X Fund), has an office in Shanghai and has recruited Chinese national Ningfeng Hu to scout for potential unicorns in China.

2. ADQ: UAE's Sovereign Wealth Fund

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

3. IHC: Investment Heavyweight Spanning Multiple Industries

International Holding Company (IHC) is one of the most influential holding companies in the UAE, with investments covering mining, real estate, financial technology, agriculture, aerospace, and renewable energy. In recent years, IHC has shown outstanding performance in the global capital markets, with a rapidly rising market valuation, 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 farm, Phoenix Miner, holding 7% of the global Bitcoin network's hash rate.

4. First Abu Dhabi Bank (FAB): 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 serves as a financial hub in the Middle East and North Africa (MENA) region. In recent years, FAB has ventured into the digital finance and blockchain field, paving the way for the UAE to further integrate into the global cryptocurrency market.

Succession Struggle: The Ambitions of the Suppressed Crown Prince

Tahnoun is not only a top-tier capital player but also a deeply ambitious political strategist. There was a time when he was on the verge of becoming Abu Dhabi's Crown Prince, but ultimately, it did not come to fruition.

The traditional succession in the UAE royal family is usually "brother succeeds brother," meaning that in 2022, Tahnoun's brother, the current UAE President, MBZ, succeeded their eldest brother to the throne. As the President's younger brother, Tahnoun and his brothers theoretically all have the opportunity to inherit the throne. With Tahnoun's significant influence in finance, technology, defense, and other fields, he was seen as the most likely candidate to become the Crown Prince.

However, the current UAE President, MBZ, decided to break the tradition of "brother succeeds brother" by directly naming his son Khalid as the Crown Prince, ensuring that the power succession does not fall into the hands of his brothers. The position of Crown Prince has become the focus of power struggles, leading to a series of internal royal family power plays.

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

Faced with his brother's stubbornness, Tahnoun made a shrewd transaction: exchanging control of the 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 worth up to $1.5 trillion.

This expanded Tahnoun's economic influence beyond even his nephew, Crown Prince Khalid. Since then, Tahnoun's power has grown stronger, extending beyond finance to become the mastermind behind the UAE's intelligence and security system.

He directly controls G42, the UAE intelligence agency, and multiple cybersecurity entities, considered a key figure in the UAE's global spy network. He orchestrated and executed Project Raven, a large-scale surveillance program targeting political dissidents, which caused a major uproar after being exposed by Western media. His cybersecurity layout even extends globally, including involvement in secret intelligence trades 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 $100 million annual revenue company or create a technology that would make him famous. G42, the corporate group, has already stepped into the realm of national security, with most of the company's technology and data centers located in the Zayed Military City, a restricted area where all G42 employees need 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 involved in the UAE market, with approximately 1,000 employees, establishing offices in Abu Dhabi and Dubai, and team members expressing approval of the UAE's cryptocurrency regulatory environment. Although Binance has always avoided setting up a formal headquarters, its relationship with the UAE has been extraordinary. Now, MGX's $2 billion investment is propelling Binance from a "resident company" directly into part of the UAE's capital strategy, providing it with a key financial and legal refuge amidst a global regulatory storm.

The investment from MGX this time around signifies that Binance is not only entering the UAE market but is also becoming a part of the UAE's capital strategic layout. This allows Binance to secure a crucial financial and legal safe haven in the global market.

The UAE has long maintained an open attitude towards cryptocurrency and has actively sought to attract global blockchain companies, making it one of the most attractive cryptocurrency regulatory regions globally. Both the Dubai Virtual Asset Regulatory Authority (VARA) and the Abu Dhabi Global Market (ADGM) have provided clear legal frameworks for crypto companies. Compared to the regulatory barriers in the European and American markets, the UAE is undoubtedly a more ideal base: more flexible and offering ample financial incentives compared to Singapore; more independent than Hong Kong, not influenced by Chinese policies, attracting a large number of Web3 companies. With the tightening of regulations in Europe and the USA, many crypto companies have chosen to relocate to Dubai and Abu Dhabi.

For Binance, this is not just capital support but also signifies a shift in its positioning in the global market. With tightening regulations in Europe and the USA, the Middle East, especially the UAE, is gradually becoming a new center of the global crypto industry.

The relationship between Binance and UAE capital did not happen overnight. Back in November 2022, Zhao Changpeng (CZ) and his executive team were reportedly secretly meeting investors in Abu Dhabi, hoping to raise funds to establish a Crypto Industry Recovery Fund to support projects facing liquidity crises at the time. According to insiders, the entities CZ sought funding from were under the Tahnoun umbrella.

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

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

Despite Binance's clarifications, Tahnoun's capital eventually came through. This $2 billion investment from MGX is not just a financial boost but also a formal recognition from Abu Dhabi's capital of Binance's importance in the global crypto market.

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

In November 2023, Binance reached a $43 billion settlement with the U.S. Department of Justice to resolve accusations of violating anti-money laundering regulations. As part of the agreement, CZ stepped down as CEO, acknowledging Binance's failure to effectively implement compliance measures and ultimately serving a prison sentence of fewer than four months.

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

Upon Richard Teng's appointment, Binance began to vigorously promote the process of compliance, enhance communication with regulatory bodies worldwide, and strive to shed its image of being at the "margins of the crypto industry."

Noteworthy is that Teng was formerly an official of the Abu Dhabi Financial Services Regulatory Authority, his background has made Binance's relationship with the UAE regulatory body closer, and MGX's investment appears more like a natural capital partnership.

For Binance, this investment signifies its ability to break free from the U.S. dollar-led global financial system, reshape its image with Middle Eastern capital and regulations, and further expand its global market presence.

This marks Binance's new identity and Abu Dhabi's new ambition.

MGX's $20 billion investment in Binance is not merely a business transaction but a profound financial game.Currently, the speculated ownership structure is: reportedly, CZ held about 90% before selling any shares, and MGX is now most likely the second largest shareholder.

Abu Dhabi is aiming to establish itself as a global crypto finance hub, and Binance hopes to leverage this opportunity to break free from Euro-American regulatory constraints and find a new global positioning.

Under Tahnoun's control, UAE capital has already exerted significant influence in the fields of artificial intelligence, sovereign wealth, and financial technology, with cryptocurrency potentially being the next piece to be integrated. MGX is just one of Tahnoun's capital instruments, and Binance is merely another significant piece in this financial chess game.

So, will Binance establish its 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 be just the beginning.

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