As an analyst, I believe that Nigeria’s crackdown on Binance and the detention of its executives, including Tigran Gambaryan, sets a dangerous precedent for regulatory actions against crypto exchanges worldwide. The Nigerian authorities’ alleged abuse of power and mistreatment of Binance executives, as detailed by CEO Richard Teng, is concerning and highlights the need for clearer regulations and communication between regulators and crypto exchanges.
Recent remarks from Binance CEO Richard Teng expressed concern over the Nigerian authorities’ misuse of power and harsh treatment towards Binance executives, specifically mentioning the ongoing detention of Tigran Gambaryan.
Teng believes it’s important for the business community to understand the consequences of the ongoing dispute between the cryptocurrency exchange and Nigerian regulators.
Binance’s Point Of View
As an analyst, I’ve noticed that the situation between Binance and Nigerian authorities has grown more tense following the arrests of Gambaryan and Nadeem Anjarwalla. On Tuesday, I expressed my own concerns over Nigeria’s intensified crackdown on our platform and its top executives, as communicated by Richard Teng.
In a blog post on Binance, the CEO shared the Binance side of the story regarding the Binance-Nigeria dispute, presenting the facts to ensure a fair and accurate understanding by the global audience.
Tigran Gambaryan, a friend and colleague of mine, has been illegally held in custody by the Nigerian authorities for over two months now. We are relentlessly advocating for his release under the campaign #BringTigranHome.
For the first time publicly, I’m sharing the full context of this situation here.
— Richard Teng (@_RichardTeng) May 7, 2024
Based on the comprehensive chronology, the story initiated in the year 2022. The Nigeria Securities and Exchange Commission (SEC) unveiled fresh guidelines mandating crypto trading platforms functioning within the country to secure their permits from the commission and adhere to certain conditions.
Binance asserts that they have made multiple attempts to contact the exchange, offering practical advice. Yet, the Nigerian regulatory body is said to have ignored their inquiries. According to Teng, no Virtual Asset Service Provider (VASP) has been granted a license under the new regulations up until now.
In the beginning of January 2024, Binance representatives held long-awaited talks with the Nigerian Financial Intelligence Unit (NFIU). During this meeting, they reached a consensus to disclose a Memorandum of Understanding (MoU), which outlines the proposed guidelines for exchanging information regarding anti-money laundering (AML) matters.
The representatives from the exchange had attended other sessions, among which was a meeting with members of the House Committee on Financial Crimes (HCFC). According to Teng’s account, as Binance employees were leaving this gathering, they were approached by unidentified individuals who proposed that they make a payment to resolve the accusations.
As a crypto investor, I’ve noticed some concerning news regarding the company I’m invested in. The CEO has reportedly claimed that they weren’t privy to the specifics of the allegations against their team, despite repeatedly asking for the information.
As a crypto investor, I’ve come across situations where Binance’s legal team has received a demand for a substantial payment in cryptocurrencies within the next 48 hours. This request came with an assurance that once settled, the issues at hand would be resolved and put to rest.
I, as a representative of Binance, chose not to honor the payment demand and instead left the country. We viewed this payment as an unjustified settlement proposal and made it clear through our legal counsel that we would only enter into negotiations under specific terms.
As of this writing, Nigeria has denied Binance’s claim of bribery.
Based on Bloomberg’s report, Binance CEO Richard Teng alleges that Nigerian authorities requested a $150 million cryptocurrency payment to settle a criminal probe against Binance. However, the Nigerian government has refuted these claims, asserting that no bribes were sought from Binance.
— Wu Blockchain (@WuBlockchain) May 8, 2024
Is Nigeria’s Crackdown Setting A Dangerous Precedent?
In February, it was proposed by the exchange’s local consultants that a get-together be arranged with the head of the Office of National Security Advisor (ONSA). This gathering was planned for the 26th of February, and the safety of the exchange delegates was guaranteed.
Despite the joyous reunion, Gambaryan and Anjarwalla found themselves unexpectedly detained by Nigerian officials. They were charged with serious allegations, including personally overseeing the poor condition of the naira and the economy as a whole. Additionally, they faced accusations of terrorist financing and money laundering.
In the post, the CEO acknowledged the significant role played by Gambaryan in combating finance crime over the course of his career. Notably, it was revealed that this executive, who has since been detained, collaborated with international law enforcement agencies to freeze and seize assets valued at over $2 billion using their Financial Crime Compliance Team during the years 2022 and 2023.
As a financial crime and capacity building expert at Binance, I traveled to Nigeria, aware of the escalating risks and tensions. However, I didn’t go with decision-making or negotiating authority. Instead, my role was to contribute my expertise to policy discussions. (Teng clarified this.)
According to the article, Tigran Gambaryan’s predicament deteriorated significantly after Anjarwalla managed to flee Nigerian detention in late March. During a court hearing on April 25th, it was revealed by the EFCC prosecutor that since “Binance, the first defendant, is an online entity. Our only recourse is this defendant, Tigran.”
As an analyst, I would interpret Teng’s statement as follows: The Nigerian government intends to apprehend an innocent employee and imprison him in a high-risk facility with the primary objective of exerting control over Binance.
In the end, the CEO’s decision to deceive mid-level employees into coming in under false pretenses for the purpose of detaining them has established a risky new standard for businesses everywhere.
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2024-05-09 06:12