Nigerian authorities continued their case against Tigran Gambaryan on July 5. The Binance executive has been detained by the Economic and Financial Crimes Commission (EFCC) since February.
Initially sparked by concerns over currency manipulation, the conflict has escalated into a significant legal battle between Binance — the world’s largest cryptocurrency exchange — and Nigerian authorities.
Troubles begin
On Feb. 20, Binance’s Nigerian users faced issues trading Tether (USDT) for naira (Nigeria’s fiat currency) on its peer-to-peer (P2P) platform, marking the start of more significant troubles. Binance responded by restricting USDT purchases with naira, disabling the “Buy” option, and setting a 1,802 naira to US dollar peg, citing fraud prevention.
Nigerian authorities subsequently blocked access to major crypto exchanges, including Binance, due to fears of currency manipulation and money laundering, as confirmed by Binance.
This led to the detention of Binance officials Nadeem Anjarwalla and Gambaryan in Nigeria's capital, Abuja, amid an ongoing investigation by the Office of the National Security Adviser.
By March 5, Binance ceased all Nigerian naira services, halting deposits and withdrawals and delisting naira trading pairs. Users were given a three-day window to withdraw or convert their naira balances to USDT.
Related: Crypto exchanges to meet Nigerian SEC chief for regulatory talks
On March 18, the EFCC secured a court order for Binance to disclose information on Nigerian users amid concerns of money laundering and terrorism financing. An inter-agency committee also claimed forex manipulation contributed to the naira’s decline.
Escape and legal developments
Anjarwalla escaped custody on March 19, using his Kenyan passport during Ramadan prayers, while the Federal Inland Revenue Service (FIRS) initiated criminal proceedings against Binance for tax noncompliance.
On April 8, the EFCC added charges against Gambaryan for money laundering, currency speculation and tax evasion totaling $34 million. Gambaryan’s plea not to represent Binance in court was denied, resulting in his transfer to the Kuje Correctional Center.
Binance CEO Richard Teng expressed dismay on May 7 over Gambaryan’s extended detention despite Binance’s cooperation and allegations of a $150 million crypto payment demanded by an unnamed Nigerian official, which Binance interpreted as a bribe.
The spokesperson for the Nigerian Ministry of Information, Rabiu Ibrahim, dismissed the bribery claims as false and diversionary.
Related: Binance exec legal battle escalates amid US-Nigeria tug of war
On June 4, twelve US lawmakers urged President Joe Biden to secure Gambaryan’s release, alleging unfounded charges aimed at coercing Binance. Nigeria’s Minister of Information defended due process, noting Binance’s substantial earnings from Nigerian operations.
Industry concerns
By June 14, the FIRS dropped charges against Gambaryan and Anjarwalla, focusing solely on Binance through its local representative and freeing Gambaryan from future court appearances.
The Blockchain Industry Coordinating Committee of Nigeria (BICCoN) warned of the legal dispute’s adverse effects on Nigeria’s blockchain sector and advocated for a fair trial to restore investor confidence.
On July 2, Judge Emeka Nwite ordered the Kuje Correctional Center to release Gambaryan’s medical records due to health concerns. Gambaryan, who is a US citizen, received limited medical attention despite a prolonged illness.
The court also concluded the first witness examination in the EFCC’s case against Binance and Gambaryan, adjourning proceedings until July 5.
Magazine: Crypto-Sec: Phishing scammer goes after Hedera users, address poisoner gets $70K