Nigerian officials proposed secret crypto settlement, claims Binance CEO
Richard Teng, CEO of Binance, criticizes the Nigerian government's actions and condemns the illegal arrest of its members.
Recently, fresh information has surfaced indicating that Nigerian authorities attempted to pressure Binance representatives into a clandestine settlement paid in cryptocurrency during meetings held in the early months of 2024.
Richard Teng, the CEO of Binance, provided a comprehensive account of the continued detention of Tigran Gambaryan on May 7. Gambaryan, a former agent of the United States Internal Revenue Service who served as the head of Binance's financial crime compliance team, has been held in custody.
Teng strongly criticized the actions of the Nigerian government, asserting that the country has established a perilous precedent for companies worldwide by detaining two of its employees.
The situation underscores the complex intersection of cryptocurrency, international regulations, and government intervention. As the cryptocurrency industry continues to evolve and expand globally, it encounters regulatory challenges and scrutiny from authorities seeking to assert control and oversight.
The case involving Binance and Nigerian officials highlights the tensions that can arise when regulatory authorities perceive cryptocurrency platforms as operating outside the bounds of traditional financial systems. While cryptocurrency offers innovative solutions for financial inclusion and decentralization, it also presents challenges in terms of regulatory compliance and law enforcement.
The detention of Gambaryan and the alleged attempts by Nigerian officials to coerce Binance into a secret settlement raise concerns about due process, transparency, and the rule of law. Companies operating in the cryptocurrency space must navigate a complex regulatory landscape, often facing ambiguity and uncertainty regarding compliance requirements and legal obligations.
Binance's response to the situation underscores the importance of transparency, accountability, and adherence to legal standards in the cryptocurrency industry. As a leading cryptocurrency exchange, Binance has a responsibility to uphold regulatory compliance and cooperate with authorities while also protecting the rights and interests of its employees and users.
The incident serves as a reminder of the need for constructive dialogue and collaboration between cryptocurrency companies and regulatory authorities. By engaging in open communication and fostering mutual understanding, stakeholders can work together to develop regulatory frameworks that balance innovation with consumer protection and financial stability.
Moving forward, the cryptocurrency industry must continue to advocate for clear and consistent regulatory guidelines that provide legal certainty and foster responsible innovation. Governments and regulatory agencies play a crucial role in shaping the future of cryptocurrency regulation, and collaboration between the public and private sectors is essential to ensure a conducive environment for the growth and development of the industry.
The case involving Binance and Nigerian officials highlights the complexities and challenges inherent in the intersection of cryptocurrency and regulatory enforcement. As the cryptocurrency industry matures, companies and regulators need to work together to address regulatory concerns while fostering innovation and growth. Only through collaboration and cooperation can the cryptocurrency industry realize its full potential as a transformative force in the global economy.
Gambaryan, who is a highly regarded figure in global financial crime prevention, was detained while on a business trip in Nigeria. Teng outlined the exchange’s efforts to engage constructively with Nigerian authorities, including participation in regulatory discussions and cooperation with law enforcement agencies.
Request for a public hearing
According to Teng, Binance employees began discussions with Nigerian authorities during public investigative hearings following a request from the chairman of the House of Representatives Committee on Financial Crimes (HCFC).
The committee is reported to have highlighted issues related to Binance’s operations in Nigeria and outlined the lengths to which they were prepared to summon Binance, including issuing arrest warrants against the exchange’s team and CEO and preventing its delegation from leaving the country.
A public hearing was set for Jan. 10, and Binance was expected to respond to any allegations publicly in the presence of the petitioners, press, and over 30 agencies.
Teng claimed that Binance had not received details of the allegations, and the delegation sought to submit responses in writing in the absence of a public hearing. The committee chair said it would consider the request and respond to Binance’s legal counsel.
Secret crypto settlement
Binance’s CEO alleges that unknown persons approached the exchange’s employees and suggested making a payment in settlement of the allegations. Teng said Binance’s local counsel was handed over terms from an agent representing the HCFC committee:
“ Counsel reported back that he had been presented with a demand for a significant payment in cryptocurrency to be paid in secret within 48 hours to make these issues go away and that our decision was expected by the morning.”
The exchange declined the payment demand through its local legal representation and continued its engagement in the settlement negotiations. Binance put forward several demands following the incident as it prepared to continue discussions with Nigerian authorities. Binance’s conditions to continue engaging in settlement negotiations following allegations of an off-record settlement proposal.
Subsequent meetings were scheduled for late February, with many government representatives in attendance from the Office of The National Security Adviser, the Office of the President, the Central Bank of Nigeria, the Nigerian Financial Intelligence Unit, the Economic and Financial Crimes Commission, and the Nigerian SEC.
“Despite the clear risks, Tigran Gambaryan and Nadeem Anjarwalla (head of Binance Africa) received multiple assurances that they would be granted safe passage for their meetings,” Teng said.
Binance shuts down Nigerian services
The situation escalated when Nigerian officials demanded actions from Binance, including delisting the naira from their platform and providing detailed user information, resulting in the detention of Gambaryan and Anjarwalla.
Despite being given safety assurances, Binance asserts that the pair were held against their will, and their passports and mobile phones were confiscated. Gambaryan remains detained, with the Nigerian government insisting that his release is contingent on Binance’s compliance with its demands.
Binance has responded by shutting down certain services in Nigeria, hoping to resolve the situation and secure Gambaryan’s release.
