Nigerian authorities continued pursuing their case against Tigran Gambaryan on July 5th. Gambaryan, an executive at Binance, has been under detention by the Economic and Financial Crimes Commission (EFCC) since February.
The initial concerns regarding currency manipulation have spiraled into a significant legal confrontation involving Binance, the world’s largest cryptocurrency exchange, and Nigerian regulators.
Commencing Troubles
On February 20th, Binance’s Nigerian users encountered issues trading Tether (USDT) for the local currency, naira, on its peer-to-peer (P2P) platform, marking the onset of more substantial challenges. In response, Binance restricted USDT purchases with naira, disabled the “Buy” option, and set a fixed rate of 1,802 naira per US dollar, citing fraud prevention measures.
Subsequently, Nigerian authorities blocked access to major crypto exchanges, including Binance, citing concerns over currency manipulation and money laundering, which was acknowledged by Binance. This crackdown led to the detention of Binance officials Nadeem Anjarwalla and Tigran Gambaryan in Abuja, amidst an investigation led by the Office of the National Security Adviser.
By March 5th, Binance ceased all naira-related services, suspending deposits and withdrawals and removing naira trading pairs. Users were given a three-day window to withdraw or convert their naira balances into USDT.
Ongoing Legal Developments
On March 18th, the EFCC obtained a court order requiring Binance to disclose information about its Nigerian users, citing concerns related to money laundering and terrorism financing. An inter-agency committee also alleged that forex manipulation contributed to the depreciation of the naira.
Anjarwalla managed to escape custody on March 19th using his Kenyan passport during Ramadan prayers, while the Federal Inland Revenue Service (FIRS) initiated criminal proceedings against Binance for alleged tax noncompliance.
On April 8th, the EFCC added charges against Gambaryan, including money laundering, currency speculation, and tax evasion amounting to $34 million. Despite Gambaryan’s plea not to represent Binance in court, he was transferred to the Kuje Correctional Center.
Binance CEO Richard Teng expressed disappointment on May 7th over Gambaryan’s prolonged detention, despite Binance’s cooperation. Allegations surfaced of a demand for a $150 million cryptocurrency payment by an unnamed Nigerian official, which Binance interpreted as a bribe. However, Nigerian Ministry of Information spokesperson Rabiu Ibrahim dismissed these bribery claims as false and diversionary.
Escalating Legal Battle
On June 4th, twelve US lawmakers urged President Joe Biden to intervene for Gambaryan’s release, alleging that the charges were unfounded and aimed at pressuring Binance. Nigeria’s Minister of Information defended the due process, highlighting Binance’s significant earnings from its Nigerian operations.
By June 14th, the FIRS dropped charges against Gambaryan and Anjarwalla, shifting focus solely onto Binance through its local representative, thereby relieving Gambaryan from further court appearances.
The Blockchain Industry Coordinating Committee of Nigeria (BICCoN) warned of adverse impacts on Nigeria’s blockchain sector due to the prolonged legal dispute and advocated for a fair trial to restore investor confidence.
On July 2nd, Judge Emeka Nwite ordered the Kuje Correctional Center to release Gambaryan’s medical records, citing health concerns. Despite being a US citizen, Gambaryan received limited medical attention despite suffering from a prolonged illness.
The court also concluded its examination of the first witness in the EFCC’s case against Binance and Gambaryan, adjourning proceedings until July 5th.