Investment must be a "mutually agreed" matter. On the one hand, Binance's acceptance of investment must first be agreed by the major shareholder - that is, CZ must say yes; on the other hand, MGX is backed by Abu Dhabi's "super" sovereign fund (estimated to have assets under management of nearly one trillion US dollars) and has a large number of portfolios. Why would it choose Binance?
As a world-leading exchange, Binance's profitability, brand, industry influence, and industry barriers are unquestionable. Financial support is no longer a current need, so what do they want? Peter Thiel has a point in his book "Zero to One" that all businesses with profits of more than 1 billion will inevitably be linked to politics in the end. In addition to giving everyone "confidence", Binance's move is more importantly to find a "mountaintop" for itself, and it is no longer rootless.
The style of Middle Eastern sovereign funds (except Kuwait) is to invest (participate in) the largest, strongest and most influential projects, and it is best if these projects are "unique". Financial returns are important, but more important are forward-looking projects that "can impact the world".
Just like two people on a blind date holding a checklist to examine each other, they are a perfect match in terms of appearance, family background, character, etc., but will the lovers eventually get married?
Here I want to talk about the negotiation habits in the Middle East. The negotiation culture in the Middle East has distinct regional characteristics, especially in financial and commercial centers such as Abu Dhabi and Dubai. The negotiation style combines traditional Arab culture with modern business practices inherited from the UK. To put it bluntly, Arab culture (interpersonal relationships are supreme, and social hierarchy/status is strict) is used during negotiations; it is written in black and white when signing, but when it comes to execution later...
Anyone who has been to the Middle East knows that without an intermediary, it is difficult to get in touch with the person in charge, and you will meet many intermediaries who claim to have "connections" on the road, so how to screen them becomes the key. Secondly, the Middle East places more emphasis on personal reputation and personal relationships, and cultivating these relationships is a long and arduous task.
Here we have to mention one person, Richard Teng, the current CEO of Binance. I won't go into much detail about his background in this article, as there are detailed introductions on the Internet. I will just mention two points here. First, he is a representative of Singapore's elite education, proficient in Chinese and English (even Hokkien), and holds important positions in the Monetary Authority of Singapore (MAS) and the Singapore Exchange (SGX); second, after leaving SGX, he went to Abu Dhabi's ADGM Abu Dhabi Global Market, where he built ADGM from 0 to 10 during his tenure, making him one of the few Asian Chinese who can open up the Middle East securities market.
Born as an elite official in Singapore and having made achievements in the Middle East, coupled with a deep understanding of Eastern and Western business culture, Richard (blind guess) became the lubricant in the middle, allowing two proud super individuals to sit at both ends of the negotiating table.
Every step you take counts. If you can’t walk it yourself, then ask someone who has walked it before - It is no exaggeration to say that Richard’s work experience in Abu Dhabi and the extensive network of contacts he has established played an important role in facilitating this investment, further consolidating Binance’s position in the global market.
The next question is, what happens after the honeymoon period?
The test is just beginning
