May 7, (THEWILL) – Cryptocurrency trading firm, Binance, has condemned Nigeria over the detention of Tigran Gambaryan, the Head of the crypto exchange’s financial crime compliance unit.
Gambaryan was detained along with Binance Regional Manager for Africa, Nadeem Anjarwalla, who escaped on March 22, from the Abuja guest house after guards on duty led him to a nearby mosque for prayers in the spirit of the ongoing Ramadan fast.
THEWILL reports that a Federal High Court in Abuja had on April 8, ordered that Gambaryan be remanded in Kuje Correctional Centre, pending a ruling on his bail application following alleged charges of complicity in money laundering filed by the Economic and Financial Crimes Commission (EFCC).
The Federal Government, through the Federal Inland Revenue Service (FIRS), had also filed a five-count charge against Binance and its two executives, including Gambaryan and fleeing Nadeem Anjarwalla.
In the charge marked: FHC/ABJ/CR/115/2024, the Federal Government accused Binance of facilitated customer tax evasion, including non-payment of Value Added Tax (VAT), failure to file tax returns, non-payment of Company Income Tax (CIT), and complicity in aiding customers to evade taxes through its platform among others.
Speaking in a statement published on the company’s website on Tuesday, Richard Teng, Chief Executive Officer of Binance, maintained that Gambaryan is innocent. He accused Nigeria of setting a dangerous precedent for detaining its executives after they were invited to the country for a meeting.
“To invite a company’s mid-level employees for collaborative policy meetings, only to detain them, has set a dangerous new precedent for all companies worldwide. Gambaryan was being held in Nigeria for more than two months for spurious reasons,” Teng said.
In the statement, Teng asked the Nigerian government to release Gambaryan while Binance and Nigerian authorities resolve any issues.
“We will continue engagement with Nigeria’s Federal Inland Revenue Service (FIRS) on resolving potential historic tax liabilities,” he added.
The statement partly reads: “As you may be aware, one of our beloved colleagues, Tigran Gambaryan, continues to be held by the government in Nigeria for more than 70 days. There has been much public commentary on this episode, and I wanted to take this opportunity to provide the facts so that the global community’s perception may not be distorted unfairly. I also feel that it’s time to speak out about this issue on behalf of the global business community. To invite a company’s mid-level employees for collaborative policy meetings, only to detain them, has set a dangerous new precedent for all companies worldwide.
“I want to start by sharing a bit about Tigran, a person I’ve gotten to know well and admire deeply since I joined Binance. The greatest irony and most unfortunate fact is that a highly valued global financial crime fighter, who is professionally recognised by his peers in both the private and public sectors, has been detained in Nigeria for more than two months for spurious reasons.
“Tigran has devoted his professional life to fighting financial crimes. Tigran’s decade as a federal cop was documented in a book called, Tracers in the Dark: The Global Hunt for the Crime Lords of Cryptocurrency, and we put out this blog a few weeks ago to share more about his illustrious career fighting crime.
“He joined Binance after his time working for the U.S. IRS as a Special Agent to continue the work he started. He recognised that he could do even more good working for the largest company in this nascent industry to keep out bad actors and uphold market integrity. Anyone who has left public service for a private organisation can tell you that sometimes you can make an even greater positive impact working for a private company that has an extraordinary scale.
“Given this background, Tigran was hired in 2021 to help Binance develop and build stronger compliance controls, specific to law enforcement cooperation and stopping financial crime. As the head of Binance’s Financial Crime Compliance (FCC) team, he has been a strong advocate for Binance to develop policies and build compliance capabilities that set new industry standards. In 2022 and 2023, Tigran’s Financial Crime Compliance team assisted global law enforcement in freezing and seizing more than $2.2B worth of assets, including more than $285M in cooperation with United States agencies like the FBI, DOJ, DEA, and others.
“Finally, it is important to note that Tigran did not go to Nigeria as a “decision-maker,” nor a “negotiator.” He was merely acting as a functional expert in financial crime and capacity building in policy discussions.
“On February 26, Tigran and Nadeem travelled to Nigeria and were present for the meetings they had scheduled and, as stated above, received multiple assurances for their safety. In their first meeting, they met with leaders from ONSA, the office of the President, the Central Bank, NFIU, EFCC, and the SEC.
“The tone of the meeting was neutral — neither friendly nor hostile — and it seemed that overall progress was being made during the two hours or so that the meeting lasted.
“One of the EFCC leaders, with whom Tigran had built a relationship over the last several months, took them aside and told them that everything was progressing well and that Tigran and Nadeem had no need to worry. The Binance employees were told that a further meeting would take place shortly after, this time involving the most senior leaders from ONSA, CBN, SEC, and the Ministry of Communications, Innovation, and Digital Economy.
“After waiting more than two hours, the Binance employees were invited back into a meeting room albeit with different attendees than the ones announced — specifically, there were four members of the EFCC.
“The leader of the group took on a hostile approach. He said that the issues involving Binance were of national security and made the following demands: Delist naira from the Binance platform (this was the first time this request was explicitly made by Nigerian authorities to Binance), Provide granular-level detail on all Nigerian users, Provide financial/tax compliance information.
“They further explained that, until such time as Binance would fulfil these requests, Tigran and Nadeem would be their “guests” and be moved for “security reasons” to a house in a high-security compound. Additionally, they requested that Tigran and Nadeem hand over their passports.
“Following the meeting, Tigran and Nadeem were escorted to their hotel, asked to pack their belongings, and moved to the secure compound, which was controlled by ONSA. Their mobile phones were confiscated, and it was made clear to them that they were not free to leave. Both Nadeem and Tigran had no control over when and with whom they spoke.
“From this point on, Tigran (a US citizen) and Nadeem (a British-Kenyan citizen) were under detention. Both the UK High Commission and the US Embassy were alerted in the overnight hours of the detention of Tigran and Nadeem.
“The next day, Binance’s legal counsel sent an email to the leaders of ONSA, asking them to “urgently clarify the legal basis for the detention of [its] employees” and noting that their respective nation’s embassies (U.S. for Tigran and UK for Nadeem) had been notified. Our note further stated: “We understand from our employees, after conversations with you yesterday, your main concern is the listing of the naira as a tradable asset on the Binance platform. This is the first time we have been made aware of this concern in relation to the listing of the naira on our platform. We are able to delist the naira from the Binance platform. However, we ask that you guarantee the immediate release of Tigran and Nadeem and that no restrictions will be placed on their movements, including their departure from Nigeria.”
“The same day, ONSA responded by email, stating that Tigran and Nadeem were their “guests” and treated with “hospitality.”
“We also received confirmation that day that the U.S. and UK governments had been briefed on the situation and were following up closely.
“The next 24 hours were marked by aggressive behaviour towards Tigran and Nadeem where they were accused personally of holding responsibility for the state of the naira and the overall economy, and allegations of terrorist financing and money laundering.
“On February 28, we removed the naira pairing from our site and shut down the P2P product for Nigeria on the Binance platform. We advised ONSA of our actions in an email and requested that Tigran and Nadeem be immediately provided with “safe passage to the airport.
“No official response from ONSA was received that day.
“On this day, the same EFCC leader with whom Tigran had become close over the past few months broke down emotionally to Tigran. He apologised and said it was his wrongdoing as he had given Tigran and Nadeem his word that everything would be OK and that the meeting was supposed to be a friendly one.
“Soon thereafter news of Tigran and Nadeem’s detention broke in global media. Nearly a month later, on March 23, we learned that Nadeem left unlawful detention. From that point on, things went from bad to worse for Tigran.
“On April 25, during a bail hearing for Tigran Gambaryan, the EFCC’s prosecutor said to the court, “The 1st defendant [Binance] is operating virtually. The only thing we have to hold on to is this defendant [Tigran].”
“The message from the Nigerian government is clear: we must detain an innocent, mid-level employee and a former U.S. federal agent, and place him in a dangerous prison in order to control Binance.
“Since I assumed the role of CEO of Binance, I have made it a key commitment to work with global regulators and enforcement agencies to uphold the integrity of the global financial system.
“Over the past two and a half years, Binance has worked hard to restructure our organisation and personnel and upgrade our systems. We have new leadership in place with deep compliance experience and impressive backgrounds ranging from top traditional financial institutions and leading tech companies, to law enforcement and major corporate entities.
“Today, the Binance leadership team, including myself, report to a Board of Directors. The Board is responsible, as corporate steward, to safeguard the company’s interests as well as make key decisions to ensure the long-term sustainability and viability of the business. It is through this process that we have become a stronger, safer, and even more compliant and secure platform for our users. We have evolved dramatically as a business.
“This ordeal has been deeply distressing for Tigran, his family and friends, as well as the entire Binance community. As mentioned above, to remove any doubt about suggestions that we had played a role in the country’s currency crisis and as a good faith gesture, I made the difficult decision earlier this month to turn off our P2P product on the Binance platform for Nigeria and end the trading of all naira pairs on the spot exchange product on the Binance platform. Our hope when we took this drastic step was that our colleagues would be released and Binance could continue to work with the Nigerian government to resolve any further concerns. Unfortunately, that didn’t happen.
“We continue to do anything and everything we can to support Tigran. This support is unwavering.
“Let Tigran go home to his family, and then Binance will work through the same process that we have done with Nigeria’s law enforcement community voluntarily more than 600 times in the past. We will always work to protect innocent users, and bad actors are not welcome on our platform. We will work tirelessly with public and private partners to remove them. Furthermore, we will continue engagement with Nigeria’s Federal Inland Revenue Service (FIRS) on resolving potential historic tax liabilities.
“It remains unclear to me as to why this is not a solution to which the Nigerian government officials are willing to agree. The Nigerian government has extraordinary power to determine the future of Binance and the broader crypto industry within its borders. At the end of the day, Binance wants to have a future where we work alongside the Nigerian government to be part of building a strong economy for the Nigerian people. But this crisis must come to a resolution quickly, and Tigran must be allowed to go home if we’re going to move forward.
“Binance remains committed to embracing the opportunity that lies with taking an innovative approach to using digital assets and platforms but we also must build a future where we are seen, as we see ourselves, as good actors in the international community.
“I’d like to express my deepest gratitude for the many notes of support we have received from around the world in response to this crisis, and I hope that my next update is one where our employees are safe at home with their families.”
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