The country is clamping down on cryptocurrency exchanges, as Nigerians seek ways to protect themselves against an evaporating naira. From Moneyweb.
There may be a cautionary tale here for cryptocurrency executives planning on visiting Nigeria – it’s probably not a good idea right now.
Two executives from Binance, the world’s largest crypto exchange, have been detained for two weeks in Abuja, Nigeria’s capital, at a time when the country’s finance authorities are increasingly skittish over what they perceive as a cryptocurrency assault on their evaporating domestic currency, the naira, which has lost nearly 80% of its value against the US dollar over the last five years.
Both executives have impeccable law enforcement credentials.
Tigran Gambaryan, Binance’s head of financial crime compliance, is a former US Internal Revenue Service special agent tasked with bringing down drug dealers, money launderers and terrorist financiers.
He was headhunted to lead Binance’s global intelligence and investigations unit in 2021.
“I want to educate the worldwide law enforcement community on how Binance is a partner in the fight against the illicit use of cryptocurrency, keeping the ecosystem more secure and moving it forward sustainably,” Tigran is quoted as saying in 2021.
The second Binance executive detained by Nigerian law enforcement authorities is Nadeem Anjarwalla, who holds dual British and Kenyan citizenship.
From neutral to hostile
According to family members, the two arrived in Abuja on 25 February at the invitation of the Nigerian finance authorities to address a long-running dispute over Binance’s perceived role in devaluing the naira and facilitating the illicit flow of funds.
The tone of the two-hour meeting was neutral, say family members, neither hostile nor friendly, giving Anjarwalla and Gambaryan the perception that progress was being made.
“They were told that a further meeting would take place shortly after, this time involving other regulators,” the families say in a statement.
“After waiting more than two hours, they were invited back into a meeting room albeit with different attendees than the ones announced. This meeting was more hostile.”
The two were then escorted to their hotel, asked to pack their belongings, and moved to the guest house-cum-secure compound, believed to be controlled by the Office of the National Security Advisor (ONSA).
“It was not explained to them why this was happening and no charges were brought,” the families say.
The US and UK embassies were then alerted of their detention.
Court order
A court order was issued on 28 February authorising Nigeria’s Economic and Financial Crimes Commission (EFCC) to detain the two executives for 14 days, which ended on Tuesday 12 March.
Both men were visited by embassy officials in the presence of an EFCC guard. Anjarwalla fell ill and was admitted to hospital on 4 March.
He refused to undergo blood tests without someone from the UK High Commission present as he “does not trust the results won’t be manipulated,” the families say.
Cryptocurrencies, particularly US dollar stablecoins such as Tether and USDC, have become massively popular in Nigeria as a way for citizens to hedge against a weakening naira.
Listen: African currencies are being smashed as stablecoins come to the rescue
Last week, Binance announced that it would discontinue all naira services and urged clients to either withdraw their naira, trade their naira assets, or convert their naira into crypto.
Multiple accusations
Voice of America reports that Nigerian authorities have accused Binance of exploitation, devaluation of the naira, and money laundering. Binance is also accused of manipulating exchange rates through speculation and rate-fixing, leading to the devaluation of the naira. The Nigerian government claimed that $26 billion worth of transactions on the Binance platform were untraceable.
Binance has denied any wrongdoing, but this is not the first time it has bumped heads with regulators.
In November 2023, founder Changpeng Zhao vacated the CEO position after pleading guilty to flouting US anti-money laundering regulations, while the company agreed to pay fines of $4.3 billion.
Read:
Binance is a ‘hotbed’ of illegal activity, bipartisan US senators allege [Mar 2023]
Binance CEO CZ, crypto’s top man, faces more than ‘FUD’ in CFTC suit [Mar 2023]
The sudden downfall of Changpeng Zhao, the crypto titan behind Binance [Nov 2023]
The company has been working hard to clean up its image and cosy up to regulators, though the recent Nigerian arrests suggest it still has a way to go.
“Tigran [Gambaryan] is merely an employee. He personally has never had any influence over Binance’s business decisions that could affect Nigeria’s economy,” says his wife Yuki. “He is just an ordinary US citizen who works hard and lives an honest life.
“Tigran is globally recognised for his work in law enforcement and in fact, I think many of his peers would say that cryptocurrencies are becoming safer because of Tigran’s efforts.”
Adds Elahe Anjarwalla, wife of Nadeem Anjarwalla: “Nadeem is a middle management employee of Binance with no decision-making authority. He joined Binance in East Africa about a year ago and only recently assumed responsibility for government affairs in West Africa. When summoned for a meeting with government bodies in Nigeria, he dutifully attended, never thinking it would lead to his detention.
“All I want is for Nadeem to be allowed to come back home to us. I am hopeful that negotiations between Binance and the Nigerian government can continue without Nadeem and Tigran being held there and I am praying every day that our families can be reunited soon.”
What Binance says …
Binance provided Moneyweb with the following brief comment: “While it is inappropriate for us to comment on the substance of the claims at this time, we can say that we are working collaboratively with Nigerian authorities to bring Nadeem and Tigran back home safely to their families.
“They are professionals with the highest integrity, and we will provide them all the support we can. We trust there will be a swift resolution to this matter.”
Moneyweb previously interviewed former law enforcement officials Nils Andersen Röed and Jarek Jakubcek, now with Binance, on their role in training local regulators on ways to track crypto criminals.
