- Binance’s Tigran Gambryan has been denied bail in Nigeria.
- Gambaryan has been in Nigerian custody for nearly three months.
- Binance’s recent troubles in Nigeria can be traced to over a year ago.
There appears to be no end in sight for Tigran Gambaryan’s Nigerian nightmare.
After weeks of delays, on Friday, May 17, Nigerian Federal High Court Justice Emeka Nwite finally decided on the Binance compliance officer’s bail application. But the decision was not what the executive had hoped for.
Bail Denied
In a ruling on Friday, Nigerian Federal High Court Justice Emeka Nwite denied Gambaryan’s bail application, deeming the Binance executive a flight risk. The judge cited the escape of Gambaryan’s colleague Nadeem Anjarwalla in March 2024 as part of his considerations for his ruling.
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The decision comes despite arguments from Gambaryan’s lawyers that the Binance executive could not be a flight risk as his travel documents were seized during his initial detention in February 2024.
Binance, Gambaryan, and Anjarwalla face tax evasion and money laundering charges in Nigeria.
At the time of writing, Gambaryan has been in Nigerian detention for 81 days or nearly three months, over a month of which has been spent in one of the country’s most notorious prisons known to hold local terrorists and, on occasion, former high-ranking politicians, far away from his family and friends.
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The court’s recent decision suggests that the Binance executive’s incarceration will likely continue until ongoing cases are resolved.
How exactly did the 40-year-old former U.S. IRS Special Agent end up in this nightmare?
Strained Relations
In 2023, it became clear that Binance had found itself in the crosshairs of Nigerian regulators; however, the severity of the exchange’s situation in the country was unclear at the time.
In June 2023, the country’s SEC issued a circular banning the operations of “Binance Nigeria Limited,” believing it to be the international crypto exchange when, in fact, the registered business domain belonged to a squatter who had hoped to sell it for a profit to the actual business, a common practice with web domains.
Realizing this gaff, in July 2023, the SEC issued another warning to crypto investors, citing the international Binance exchange and stating that its operations in Nigeria were illegal as it was not registered or regulated in the country. The regulator further warned the exchange against soliciting customers in the West African State.
Fast forward to January 2024, Binance’s relations with the Nigerian government took a turn for the worse.
Signs of the Times
As disclosed in a recent blog post by Binance CEO Richard Teng, in January 2024, the firm had obliged an invitation to an investigative hearing from the country’s Chairman of the House Committee on Financial Crimes (HCFC).
During a private pre-hearing meeting, exchange representatives were informed of serious allegations against the firm and the lengths to which the government was willing to go to summon it, including issuing a warrant to arrest members of the team.
According to Teng, this threat was not taken too seriously because it was understood that the HCFC could not issue warrants for arrest. However, this threat would be a sign of things to come.
An Unfaithful Trip
By February 2024, it was clear that the situation in Nigeria had escalated. Authorities were actively accusing Binance of facilitating the manipulation of the naira through its peer-to-peer (P2P) trading platform.
Amid the allegations, the exchange received another invite to resolve things in a meeting with the Office of the National Security Adviser. The selected delegates for the meeting were Binance Chief Financial Crime Compliance Officer Tigran Gambaryan and Binance Regional Manager for Africa Nadeem Anjarwalla. Despite the risks, both men received several assurances that they would not be harmed.
The guarantees, however, failed to hold up, and the seemingly innocuous meeting quickly became a nightmare.
Detention
On February 26, Gambaryan and Anjarwalla met with Nigeria’s NSA Nuhu Ribadu as arranged. However, the talks quickly deteriorated as the NSA requested that the exchange share their customer details with authorities—a request that the mid-level Binance managers asserted they could not discuss outside their embassies.
When they refused to heed the NSA’s request, their travel documents were seized, and they were escorted to an NSA guest house, where they were transferred into the custody of the Economic and Financial Crimes Commission, the country’s anti-graft agency. Authorities quickly obtained a remand order to hold the Binance executives for at least 12 days pending undisclosed investigations.
And so began Gambaryan’s Nigerian ordeal. He and Anjarwalla would be held for about a month without formal charges, and before these formal charges materialized, the latter would flee his captors.
A Daring Escape
Anjarwalla fled EFCC detention on Friday, March 22, after being led to a nearby mosque to pray amid the ongoing Ramadan fast. The Binance regional manager is believed to have slipped through the crowd and made his way to the Abuja airport, where he boarded a “Middle East airliner” out of the country.
At the time, Anjarwalla’s flight sparked several questions as the ONSA seized his British passport in February 2024. The prevailing theory is that the Binance executive, also a Kenyan citizen, had hidden a second passport on his person.
Tax Evasion and Money Laundering Charges
On March 25, a mere three days after Anjarwalla’s escape, Nigeria’s tax authority, the Federal Inland Revenue Service (FIRS), announced tax evasion charges against Binance, naming Tigran Gambaryan and Nadeem Anjarwalla as the second and third defendants.
The lawsuit outlines four charges, including “non-payment of Value-Added Tax (VAT), Company Income Tax, failure to file tax returns, and complicity in aiding customers to evade taxes through its platform.”
On March 28, the EFCC filed money laundering charges, claiming that the exchange concealed $35.4 million in proceeds from illicit activity in Nigeria from 2023 to 2024.
A Complicated Legal Battle
The Nigerian case against Binance has attracted significant international attention not just because of the involvement of the leading exchange but because the country attempted to hold mid-level managers accountable for the crypto exchange’s alleged actions.
This particular strategy and the exchange’s unique model of operating without a headquarters have posed procedural hurdles in the case, particularly the issue of how best to serve the crypto exchange.
However, prosecutors were able to convince the court that the exchange could be served through Gambaryan. On April 8, he pleaded not guilty on behalf of himself and Binance to the EFCC’s money laundering charges.
Following Friday’s hearing, he is set to be arraigned on Wednesday, May 22, on amended tax evasion charges from the FIRS.
On the other hand, the money laundering case is set to resume on Thursday, May 23, with the cross-examination of an SEC director who testified on Friday that the firm operated in the country without a license and disrupted naira price discovery.
The Nigerian Ministry of Justice has yet to return a DailyCoin request for comment at the time of writing.
On the Flipside
- Binance CEO Richard Teng has claimed that efforts to seek practical guidance from the Nigerian SEC on licensing procedures in 2022 had been met with no response.
Why This Matters
Tigran Gambaryan has spent nearly three months incarcerated in Nigeria. The recent ruling ensures that the Binance executive will unlikely get a reprieve soon.
Read this for more on the Gambaryan case:
Nigeria Wields Binance Exec’s Coworker’s Flight in Bail Hearing
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