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Binance Bosses “Held Against Their Will” in Nigeria Despite Exchange Leaving Country

Published March 12, 2024 1:05 PM
Teuta Franjkovic
Published March 12, 2024 1:05 PM

Key Takeaways

  • Nigerian authorities have detained Tigran Gambaryan and Nadeem Anjarwalla for two weeks.
  • The Nigerian government invited them to negotiate over a disagreement involving Binance.
  • The contention revolves around approximately $26 billion unaccounted funds.

Tigran Gambaryan, head of financial-crime compliance at Binance, traveled to Nigeria’s capital to address the country’s government’s accusation that the crypto exchange was destabilizing the nation’s currency.

The American, who previously served as a special agent for the Internal Revenue Service, embarked on what he anticipated would be a brief business trip. He has yet to return.

Nigeria Detains Binance Execs Amid Currency Turmoil

Nigerian authorities have detained  Tigran Gambaryan and his fellow Binance executive Nadeem Anjarwalla.

Gambaryan,, and Anjarwalla, a UK and Kenyan national serving as Binance’s regional manager for Africa, are currently held in a guarded residence without any formal charges.

Despite the Nigerian government’s invitation for discussions, there has been no official statement regarding their detention. Nigeria, which has a population exceeding 220 million, has experienced several currency crises recently. One of them marked the first notable incident where cryptocurrency has been implicated.

Dollar value of crypto transactions
Dollar value of crypto transactions sent to each country, Sub-Saharan Africa | Credit: Chainalysis

Crypto Boom in Nigeria – Binance at the Forefront

In recent years, Nigerians have increasingly turned to cryptocurrencies  as a haven for their savings. Nearly 30% inflation in January and a rapidly depreciating currency have made it one of the poorest performers globally this year. With two-thirds of the population living in poverty, Nigeria is the world’s second-largest adopter of cryptocurrency, trailing only behind India. A study by Chainalysis  also found Nigerians conducted around $60 billion in crypto transactions in the year to June 2023.

Given the government’s strict control over foreign exchange and the official exchange rate, many Nigerians have opted for stablecoins—digital currencies tied to the value of the US dollar—as an alternative. This move effectively created a parallel market where the exchange rate between the local currency, the naira, and the dollar significantly diverged from the official rates set by the government. Binance, as the most favored platform, inadvertently became the benchmark for this unofficial rate among currency traders.

Bayo Onanuga, a special adviser to the Nigerian president, criticized  Binance for essentially determining Nigeria’s exchange rate, thus usurping the central bank’s role.

Nigeria’s New Leaders Wrestle Wobbling Currency

The newly elected government in Nigeria , seeking to address the complications of multiple official exchange rates, aimed to streamline the system and allow market dynamics greater influence over the currency’s valuation last year. However, the persistent disparity between the government’s valuation of the currency and the exchange rate on Binance’s website  has proven to be a significant issue.

Onanuga disclosed  that Binance was currently cooperating with Nigerian authorities. Discussions regarding compensation to Nigeria are  currently underway.

The Nigerian Communications Commission has directed telecommunications companies to block access to Binance and other cryptocurrency platforms’ websites. Olayemi Cardoso, the chief of Nigeria’s central bank, raised concerns that these platforms might be exploiting the market.

How many Nigerian naira buys $1
Credit: Nigerian Autonomous Foreign Exchange Market/abokiFX

Specifically, he highlighted  that over the past year, $26 billion had circulated through Binance in Nigeria, involving transactions from sources and users that the central bank was unable to track or identify clearly. The origins of this substantial figure remain unspecified by Cardoso.

Binance Insists on User Verification, Seeks Release of Detained Execs

A spokesperson from Binance emphasized  the company’s commitment to stringent identity verification for all its users, addressing concerns over regulatory compliance and security. Though the spokesperson did not specifically address the $26 billion figure mentioned by Nigerian authorities, they clarified that trading volumes on Binance are not solely related to the Nigerian naira, as the platform facilitates cryptocurrency-to-cryptocurrency exchanges. They stressed that people should not confuse total trading volumes with actual cash flows through the exchange.

Binance is actively cooperating with Nigerian authorities to ensure the safe return of their executives to their families. The company is hopeful for a prompt resolution to the situation.

In a recent blog post , Binance explained that, as a platform facilitating peer-to-peer transactions, it does not determine prices. The company has mechanisms in place to temporarily halt transactions during periods of significant volatility. Additionally, Binance said any merchants found attempting to manipulate the market are removed from the platform.

Binance in Compliance Quandary as Execs Held in Nigeria

Richard Teng, CEO of Binance and a former regulator, pledged to adhere to legal standards and foster relationships with governmental bodies upon assuming leadership last year. Despite these intentions, Tigran Gambaryan, 39, and Nadeem Anjarwalla, 37, Binance executives, encountered difficulties after arriving in Abuja, Nigeria, on February 25. Their visit, prompted by an official invitation for discussions with the Nigerian government, seemed promising initially.

Following a meeting with representatives from Nigeria’s central bank, securities regulator, national-security, and financial-intelligence sectors, executives believed they had made headway. The two-hour discussion appeared constructive, but the outcome took an unexpected turn. Gambaryan and Anjarwalla were taken from their hotel under escort. They were then ordered to gather their belongings. They subsequently placed in a guarded residence without explanation, leaving their families concerned and seeking answers.

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