Over the past few months, Binance has faced scrutiny in the face of Nigeria’s federal government. This Nigeria Vs. Binance dispute came to a hot point on 26th February 2024, when the Nigerian government detained two Binance execs in a trick for a meeting. Tigran Gambaryan, a United States citizen, and Nadeem Anjarwalla, a dual citizen of the UK and Kenya, are reported to have arrived in Abuja on Feb 25 by their families. The two officials visited the country following an invitation from the federal government to address the preceding dispute with Binance’s claim of unlawful operation in the country.
The two officials met with Nigerian officials the following day intending to discuss the pressing issue between the two sides but instead met with different grounds. They were taken back to their hotel rooms, ordered to pack their bags, and then brought to a ‘guesthouse’ operated by Nigeria’s National Security Agency. Their passports were seized, and since then, the two have been held under house arrest until a recent development.
Binance Executive Flees Custody
Anjarwalla, Binance Kenya-based regional manager for Africa, has reportedly escaped custody from the Nigerian authorities using a fake passport, according to a local publications report. According to reports, Anjarwalla fled detention on Friday, March 22, after he was escorted to a nearby mosque for prayers following the ongoing Ramadan fast.
He is believed to have used the Middle East airliner to flee Abuja. However, details on how he got an international flight remain unclear, given that the British passport he used to enter Nigeria is still under custody.
An immigration officer stated that Anjarwalla fled the country using a Kenyan passport. Authorities are now trying to evaluate how he acquired the passport, given that he had no other documents apart from his British passport. Different sources have emerged to argue that he might have exploited many of his allowed privileges, like access to a telephone, to plan his escape. While his final destination remains unknown, his fellow executive, Gambaryan, is still in custody following a 14-day custody extension from a court in Abuja.
Nigeria Federal Government Files Tax Evasion Against Binance
As the news of the escape of Binance’s executive escalates, other reports claim that the federal government of Nigeria has initiated a criminal proceeding against Binance.
Reports from local media have it that Nigeria’s Federal Inland Revenue Service(FIRS) filed charges of tax evasion against the exchange and the two detained executives. According to ‘The Guardian, the charges filed at the Federal High Court in Abuja were announced on Monday, March 25.
These charges implicate Binance with a four-count tax evasion accusation. These include non-payment of Value-Added Tax(VAT), Company Income Tax, failure to file tax returns, and collaboration in helping customers evade taxes through its platform.
Nigeria Vs Binance: Roots of the Saga
Nigeria has witnessed a massive adoption of cryptocurrency in recent years. Two years ago, in August 2022, the country emerged as one of the top crypto-obsessed countries in the world in terms of the number of Google searches for ‘cryptocurrency’ or ‘buy crypto.’ However, this did not sit well with the country’s regulators. First, Nigeria’s Central Bank banned regulated financial institutions from offering services to cryptocurrency exchanges in the country. Another blow followed in February 2024, when the presidential advisor called for a ban on Binance, KuCoin, and all other crypto trading platforms in the country.
This strict measure against crypto came after the country accused the crypto industry of allegedly facilitating illegal capital outflows, which resulted in the weakening of the Nigerian naira against the dollar.
One major interest was directed towards Binance’s operations. The authorities demanded a $10 billion penalty from the exchange for facilitating some $26 billion worth of untraceable funds. Additionally, they detained two of the exchange’s officials and demanded data on all Nigerians using the platform. This came days after an earlier report that Nigeria had ordered Binance to hand over information regarding its top 100 users in the country and their past six-month transaction history.
Binance Exits Nigeria
Following these major regulatory issues in the country, Binance announced it would exit from the country’s markets on 8th March 2024. This meant a full discontinuation of all transactions tied to the local currency, Nigerian naira (NGN). The news came just when Binance had delisted all NGN trading pairs on its peer-to-peer platform in late February.
Binance’s exit from Nigeria signals continued regulatory scrutiny toward crypto by major governments of the world. This has been the trend by tying cryptocurrency to money laundering, tax evasion, and terrorist financing.
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