Nigerian authorities have intensified their legal proceedings against Tigran Gambaryan, a prominent Binance executive, detained by the Economic and Financial Crimes Commission (EFCC) since February 2023.

What began as a concern over currency manipulation has escalated into a full-scale legal confrontation between Binance, the world’s largest cryptocurrency exchange, and Nigerian authorities.

Initial Disruptions

On February 20, Binance’s Nigerian clientele encountered obstacles while trading Tether (USDT) for naira on the platform’s peer-to-peer (P2P) service. This incident marked the inception of subsequent challenges. In response, Binance restricted USDT transactions with naira, disabled the “Buy” option, and pegged the exchange rate at 1,802 naira per US dollar, citing fraud prevention measures.

Nigerian authorities responded by blocking access to major cryptocurrency exchanges, including Binance, due to concerns over currency manipulation and money laundering. This blockade was corroborated by Binance’s statements.

Consequently, Binance officials Nadeem Anjarwalla and Gambaryan were detained in Abuja amid an ongoing investigation led by the Office of the National Security Adviser. By March 5, Binance suspended all services involving the Nigerian naira, halting deposits and withdrawals and delisting naira trading pairs. Users were given a three-day period to withdraw or convert their naira balances to USDT.

On March 18, the EFCC obtained a court order compelling Binance to disclose information about its Nigerian users amid suspicions of money laundering and terrorism financing. An inter-agency committee also alleged that forex manipulation contributed to the naira’s depreciation.

Escape and Legal Escalation

Anjarwalla managed to escape custody on March 19, utilizing his Kenyan passport during Ramadan prayers. Meanwhile, the Federal Inland Revenue Service (FIRS) initiated criminal charges against Binance for tax noncompliance.

On April 8, the EFCC levied additional charges against Gambaryan, including money laundering, currency speculation, and tax evasion amounting to $34 million. Gambaryan’s request to abstain from representing Binance in court was denied, leading to his transfer to the Kuje Correctional Center.

On May 7, Binance CEO Richard Teng expressed dismay over Gambaryan’s prolonged detention, despite Binance’s cooperation with Nigerian authorities. Teng also alleged that an unidentified Nigerian official demanded a $150 million crypto payment, which Binance interpreted as a bribe. However, Rabiu Ibrahim, a spokesperson for the Nigerian Ministry of Information, dismissed these bribery allegations as unfounded and diversionary.

International and Industry Repercussions

On June 4, twelve U.S. lawmakers urged President Joe Biden to intervene for Gambaryan’s release, claiming the charges were baseless and aimed at coercing Binance. Nigeria’s Minister of Information defended the due process, highlighting Binance’s significant earnings from its Nigerian operations.

By June 14, the FIRS dropped charges against Gambaryan and Anjarwalla, shifting focus solely on Binance through its local representative and absolving Gambaryan from future court appearances.

The Blockchain Industry Coordinating Committee of Nigeria (BICCoN) cautioned that the legal dispute could negatively impact Nigeria’s blockchain sector and called for a fair trial to restore investor confidence.

On July 2, Judge Emeka Nwite ordered the Kuje Correctional Center to release Gambaryan’s medical records due to health concerns. Gambaryan, a U.S. citizen, had received limited medical attention despite a prolonged illness. The court also concluded the first witness examination in the EFCC’s case against Binance and Gambaryan, adjourning the proceedings until July 5.