As you may know, one of our dear colleagues, Tigran Gambaryan, has been detained by the Nigerian government for over 70 days. Many public figures have spoken out about this situation, and I wanted to take this opportunity to set the record straight so that the global community’s perception is not unfairly distorted. I also believe it is time to speak out on behalf of the global business community: inviting mid-level employees of a company to collaborative policy-making meetings with the intent of detaining them has set a dangerous new precedent for all businesses around the world.
I’ll start by telling you a little bit about Tigran, someone I’ve gotten to know well since joining Binance and who I deeply admire. The irony, and the most unfortunate aspect of this situation, is that someone who is committed to fighting global crime, who has an excellent reputation in this field and is professionally recognized by his colleagues in the private and public sectors, has been under arrest in Nigeria for over two months on spurious charges.
Tigran has dedicated his career to fighting financial crimes. His ten years as a federal police officer were chronicled in a book called Cryptocurrency Criminals: Tracking the Dark Web, where you can learn about his illustrious career in crime fighting.
A former special agent with the US IRS, he joined Binance to continue his work: he realized he could do even more good in the world by lending his services to the largest company in this nascent industry, keeping bad actors at bay and preserving market integrity. Anyone who has left government service to join a private organization will tell you the same thing: sometimes you can have an even greater positive impact by working for a private actor of extraordinary stature.
Given his experience, Tigran was hired in 2021 to help Binance develop and implement more robust compliance controls dedicated to working with law enforcement and combating financial crimes. As the head of Binance’s Financial Crime Compliance (FCC) team, he has been a strong advocate for developing policies and compliance capabilities within Binance that set new standards for the industry. In 2022 and 2023, Tigran’s FCC team helped global law enforcement freeze and seize over $2.2 billion in assets, including over $285 million in cooperation with U.S. agencies such as the FBI, DOJ, DEA, and others.
Finally, it is important to note that Tigran did not visit Nigeria as a “policy maker” or “negotiator”: he was simply carrying out his duties as an expert on financial crime and capacity building in discussions aimed at developing policies.
The context of the situation in Nigeria
I think it is important to go back a few years to get a clearer picture of our activities in Nigeria, because in reality this whole story started almost two years ago.
From 2022 to 2023
In May 2022, Nigeria’s Securities and Exchange Commission (SEC) issued its Digital Assets Regulations, which brought cryptocurrency under its purview. The rules required crypto exchanges operating in Nigeria to obtain a license from the SEC and comply with certain requirements, but failed to spell out several of the key requirements that must be met to obtain a license (e.g., details of the application process, licensing fees, etc.), making it virtually impossible to apply for a license.
Binance has proactively reached out to the SEC on several occasions to seek practical guidance on the licensing process, and has offered to engage with Nigerian authorities in an advisory capacity.
Thus, in a letter dated June 22, 2022, Binance stated that it “would welcome and appreciate the opportunity to collaborate with the SEC and other industry stakeholders as part of the Blockchain Coalition over the coming days to clarify the application of the new rules, particularly regarding the interaction of these rules with the position taken by the Central Bank of Nigeria, the licensing fee structure, and the implications of registration on the facilitation of bank accounts in the region.”
Binance, however, never received a response from the SEC, and to our knowledge, no virtual asset service provider (VASP) has obtained the permit required by the new regulations to date.
Nearly a year later, on June 9, 2023, the SEC published a circular on its website warning the Nigerian public about the activities of the Binance exchange and ordering the company to immediately cease soliciting Nigerian investors. The circular stated that “Binance Nigeria Limited is neither registered nor regulated by the Commission, and its activities in Nigeria are therefore illegal… Binance Nigeria Limited is hereby directed to immediately cease soliciting Nigerian investors in any form whatsoever.”
The reference in the circular to “Binance Nigeria Limited” was incorrect: Binance Nigeria Limited is not affiliated with Binance and was registered by third parties in violation of the Binance trademark and for arbitration purposes, should Binance wish to establish itself in Nigeria. Nevertheless, it was clear that the SEC was targeting the Binance exchange.
Recognizing that the SEC’s intent was to address this circular to the real Binance exchange, Binance immediately suspended its solicitation activities in Nigeria, including its paid advertising, organic search, online and in-person events, and all communications to users. These restrictions remain in effect today.
In our letter to the SEC at that time, we reiterated that Binance was “fully prepared to cooperate with the Commission and comply with applicable regulations.” We also requested a meeting with the SEC, noting that we had previously offered such a meeting without receiving a response from the SEC.
Again, the SEC did not respond to this letter. We have continued to engage constructively with the SEC by commenting on its amended regulations, and our last comment was on March 29, 2024.
In August 2023, we decided to actively participate in Nigeria’s digital asset sector. We began supporting the Digital Currency Coalition (DCC), an industry association of leading local and foreign digital asset service providers in Nigeria, by promoting regulatory engagement and lobbying for the establishment of cryptocurrency regulations.
In November 2023, just as we did for law enforcement around the world, Binance hosted law enforcement training for the Nigerian Financial Intelligence Unit (NFIU) and the Economic and Financial Crimes Commission (EFCC). These initiatives have helped strengthen efforts to combat cryptocurrency crime around the world, but are also a critical tool for building relationships that allow the Tigran team to work more closely with law enforcement.
In early December 2023, Binance received a letter from the Chairman of the House Financial Services Committee (HFSC) requesting that we appear at a public investigative hearing scheduled less than two weeks later.
2024
Using informal channels, we were eventually able to agree with the HCFC that the hearing should be postponed until January 10, 2024 to give us a realistic time frame to prepare for it and send a delegation of Binance employees who are experts on the topics to be discussed.
Tigran Gambaryan and several other members of our team traveled to Nigeria to participate in this and subsequent meetings. On January 5, Binance employees met with the NFIU to discuss information sharing and continued capacity building. The next agreed step was for the NFIU to send a Memorandum of Understanding (MoU) outlining the proposed terms for sharing anti-money laundering (AML) information.
On January 8, prior to the hearing, Binance employees met in person with three members of the HCFC and a clerk in Abuja, at the premises of the House of Representatives. This agreed private meeting was chaired by Messrs. Peter Akpanke, Philip Agbese and Peter Aniekwe, and a clerk.
During the conversation, the HCFC stressed the importance of the issues raised and the lengths it was prepared to go to summon Binance, including issuing arrest warrants for our team and CEO and preventing our team from leaving the country. While these words are concerning, it was understood that in practice, the HCFC does not have the authority to issue arrest warrants.
The HCFC confirmed that the public hearing would take place on January 10, and that Binance would have the opportunity to publicly respond to all allegations in the presence of petitioners, the press and more than 30 organizations.
Despite several requests, Binance had still not received the details of the allegations in question, and our employees therefore asked if they had the opportunity to submit our responses in writing and without a public hearing. They made this request for several reasons, including the sensitivity of the information and the opportunity to see the full allegations in order to prepare a comprehensive substantive response. At the end of the meeting, the Chair confirmed that he would review the matter and respond through Binance’s local counsel.
However, as our employees were leaving the premises, they were approached by unknown persons who suggested that they make a payment to settle the allegations. Later that day, our local lawyer (who was representing us at the time) was summoned by HCFC through a person claiming to be his agent, who relayed HCFC’s terms and asked our local lawyer to advise us. The lawyer responded that he had become aware of a request for a secret payment of a sum of cryptocurrency within 48 hours to settle these issues, and that our decision was expected by the following morning. Our team’s concern for their safety in Nigeria grew, and they immediately left. Of course, we declined this request for payment through our lawyer, not considering it to be a legitimate settlement offer, and indicated that we would enter into settlement negotiations on the following terms:
Binance needs to see the petition in question and/or the details of all allegations.
Any settlement must be formal, recorded in writing and signed by all parties involved.
Any settlement must encompass all affected entities and fully and finally resolve all allegations, including any potential historical tax liability, if any, with safeguards.
Although the exact terms of any settlement must sometimes remain private, the public needed to know to some extent that we had managed to reach a resolution.
There is to be no public hearing before the HCFC.
Our contractors and employees must not be intimidated, harassed or detained.
Our lawyer relayed Binance's terms, which were initially rejected; our lawyer nevertheless informed us that the HCFC had ultimately agreed to the requirements described above.
Shortly after our team returned, the NFIU forwarded the draft of the MoU, which outlines Binance’s commitment to voluntarily file RAS/DODs, train Nigerian and regional law enforcement agencies, and ensure cooperation between the two parties. We viewed this draft as a step forward in cooperative efforts to make cryptocurrencies more secure and free from criminal activity.
On February 5, a Binance advisor with close ties to Nigerian officials advised that we set up a meeting with the director of the Office of the National Security Advisor (ONSA), who would become critical to Binance’s expansion into Nigeria. Again, we saw this as a positive development: rather than dealing with multiple agencies/departments, we would be able to direct all communications to a very senior and highly respected representative of Nigeria’s law enforcement.
In early February, our team was in touch with ONSA and the EFCC to discuss meeting opportunities. In one of those emails, we explained our “central role in global law enforcement efforts. We collaborate with law enforcement agencies around the world by conducting joint investigations and providing assistance when needed. In particular, we have established a strong and productive relationship with our Nigerian counterparts, including the EFCC.” Binance’s proposed meeting agenda included the following:
Introducing Binance and our global operations and compliance program.
Binance’s cooperation with EFCC and NFIU to date.
Overview of the commitment to the SEC, Binance’s good faith steps to comply with SEC guidance, and ONSA’s assistance going forward.
A petition ahead of HCFC and ONSA recommendations on engagement.
A strategy to improve our engagement and strengthen our relationship with ONSA.
A meeting was scheduled for 26 February 2024 at 2:00pm at the ONSA offices in Abuja, Nigeria. The following government officials were confirmed to attend: the National Security Adviser, the Director General of the SEC and the Deputy Governor of the Central Bank of Nigeria (CBN).
Despite the obvious risks, Tigran Gambaryan and Nadeem Anjarwalla (Head of Binance Africa) were repeatedly assured that they would be able to safely travel to their meetings.
Meetings of February 26
On February 26, Tigran and Nadeem traveled to Nigeria and attended the scheduled meetings. As mentioned above, they were assured several times that there would be no threat to their security. During their first meeting, they met with leaders of ONSA, the Office of the President, the Central Bank, the NFIU, the EFCC, and the SEC.
The tone of the meeting was neutral, neither friendly nor hostile, and the two-hour meeting suggested general progress.
One of the EFCC officials, whom Tigran had grown close to in recent months, confided to our two colleagues in private that everything was looking good, and that Tigran and Nadeem had nothing to worry about. They were informed that another meeting would take place very soon, this time with the top brass of ONSA, the CBN, the SEC and the Ministry of Communications, Innovation and Digital Economy.
After waiting for more than two hours, Binance employees were invited into a meeting room with participants who were not those announced: four EFCC members.
The leader of this group adopted a hostile stance, stating that the issues concerning Binance were a matter of national security and making the following demands:
Delist the naira from the Binance platform (this was the first time that this request was made explicitly by the Nigerian authorities to Binance).
Provide granular details of all Nigerian users.
Provide details on financial/tax compliance.
The EFCC representatives further explained that until Binance complies with these demands, Tigran and Nadeem will remain their “guests” and will be transferred to a high-security compound for “security reasons.” They also demanded that Tigran and Nadeem surrender their passports.
At the end of the meeting, Tigran and Nadeem were escorted to their hotel, where they were asked to gather their belongings before being taken to the secure compound, under ONSA control. Their mobile phones were confiscated, and they were unequivocally forbidden from leaving the premises. Nadeem and Tigran had no control over when and with whom they spoke.
This is when the detention of Tigran (a US citizen) and Nadeem (a dual British-Kenyan citizen) began. The British High Commission and the US Embassy were alerted overnight about their situation.
The following day, Binance’s lawyer sent an email to ONSA’s leadership asking them to “urgently clarify the legal basis for the detention of [its] employees,” noting that the embassies of their respective countries (the US for Tigran and the UK for Nadeem) had been informed of the situation. Speaking on behalf of Binance, he also added that “Our employees have reported to us that after their conversations with you yesterday, your main concern was the listing of the naira as a tradable asset on the Binance platform. Until then, we were not aware of this concern regarding the listing of the naira on our platform. We are prepared to delist the naira from the Binance platform; however, we request that you ensure the immediate release of Tigran and Nadeem and their freedom of movement, including allowing them to leave Nigeria.”
The same day, ONSA responded by email stating that Tigran and Nadeem were their “guests” and treated with “hospitality.”
We also received confirmation that same day that the US and UK governments had been informed of the situation and were monitoring it closely.
The next 24 hours were marked by aggressive behaviour towards Tigran and Nadeem, who were personally accused of being responsible for the state of the naira and the economy in general, and targeted with allegations of terrorist financing and money laundering.
On February 28, we removed naira pairs from our site and cut off access to certain products for Nigeria on the Binance platform. We informed ONSA in a further email and requested that Tigran and Nadeem be immediately “taken safely to the airport.”
We have not received any official response from ONSA to date.
That day, the same EFCC leader that Tigran had become close to over the past few months broke down in front of Tigran, apologizing profusely and taking responsibility for the situation the two employees found themselves in, as he had given Tigran and Nadeem his word that everything would be fine and the meeting would be amicable.
Soon after, the news of Tigran and Nadeem’s detention made headlines around the world. Almost a month later, on March 23, we learned that Nadeem had escaped this illegal detention: from that point on, things got worse for Tigran.
The current situation
During Tigran Gambaryan’s bail hearing on April 25, the EFCC prosecutor told the court that “The first accused [Binance] operates virtually. We have to keep this accused [Tigran] because he is all we have in this case.”
The Nigerian government's message is clear: it feels compelled to hold an innocent mid-level employee and a former U.S. federal agent in a dangerous prison in order to control Binance.
Since assuming the role of CEO of Binance, I have been committed to working with regulators and law enforcement around the world to preserve the integrity of the global financial system.
For the past two and a half years, Binance has been working tirelessly to restructure its organization and people, and upgrade its systems. We have brought in a new leadership team with impressive compliance experience and track records, including roles at major traditional financial institutions, large technology companies, law enforcement, and major enterprises, to name a few.
Today, Binance’s management team, including myself, report to a Board of Directors who, as stewards of the company, are responsible for protecting the company’s interests and making important decisions to ensure its long-term sustainability and viability. It is through this process that our platform has become stronger, safer, and even more compliant and secure for our users. We have evolved significantly as a company.
This ordeal has deeply affected Tigran, his family and friends, and the entire Binance community. As explained above, to dispel any doubt about suggestions that we had any responsibility for the country’s currency crisis and as a demonstration of our good faith, I took the difficult decision earlier this month to cut off access to one of our products on the Binance platform for Nigeria and to halt trading of all naira pairs on the Spot exchange product on the Binance platform. In taking this drastic step, we hoped that our colleagues would be released and that Binance could continue to work with the Nigerian government to resolve any further issues: unfortunately, this has not been the case.
We continue to do everything we can to support Tigran, no matter what.
Let Tigran go home to his family. Binance will do exactly what it has voluntarily done over 600 times in the past with Nigerian law enforcement. We will always strive to protect innocent users, and malicious actors are not welcome on our platform: we will work hard with our public and private partners to exclude them. We will also continue to work with Nigeria’s Federal Inland Revenue Service (FIRS) to resolve any historical tax liabilities.
I still don’t understand why Nigerian government officials refuse to accept this solution. The Nigerian government has extraordinary power over the future of Binance and the broader crypto industry within its borders. Ultimately, Binance simply wants a future where we work hand in hand with the Nigerian government to help build a strong economy that benefits the Nigerian people. However, this crisis must be resolved quickly, and Tigran must be allowed to return home if we are to move forward.
Binance remains committed to taking an innovative approach to the use of digital assets and platforms, but we must also build a future where we are seen as a benevolent actor in the global community, a view that reflects how we view our business.
I would like to express my deepest gratitude for the many messages of support we have received from around the world in response to this crisis, and I hope to soon be able to report that our employees are safe at home with their families.
Richard Teng, CEO of Binance.
