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OpinionsCrypto-currency King Binance accused of big financial fraud by Nigeria

Crypto-currency King Binance accused of big financial fraud by Nigeria


The African Nation is livid that the company disrupted its

By Arun Kumar Shrivastav

Cryptocurrency giant Binance faces a tangled legal mess in Nigeria. The company is accused of serious offenses, including money laundering and tax evasion. Nigerian authorities in a formal chargesheet in the Federal Court alleged Binance facilitated the movement of at least $35 million in illegal funds. This anti-corruption charge came after the country's tax agency accused the platform of tax avoidance.

Binance's head of financial compliance, Tigran Gambaryan, is currently detained in Nigeria. He, along with a colleague, Nadeem Anjarwalla (regional manager for Kenya), have been named in both criminal cases. Adding a layer of drama, Nadeem Anjarwalla, a British citizen and Binance's Kenya manager, managed a dramatic escape. On March 22, following a prayer service during Ramadan, he slipped away from his guards and fled Nigeria entirely. Authorities were unable to locate him before he disappeared.

Adding to the intrigue, it appears Anjarwalla held onto his Kenyan passport despite being detained alongside his colleague (US citizen Tigran Gambaryan) in late February.

Nigerian officials are throwing the book at Binance. From the central bank governor to security personnel, they've painted a picture of Binance as a lawless entity. They accuse the platform of disrupting Nigeria's financial system, the largest in Africa by population, and facilitating transactions for criminals.

The drama between Binance and Nigeria began in February as the country grappled with a plummeting currency. The Nigerian Naira had lost a staggering 90% of its value against the US dollar since the new government took office in May 2023.

Desperate for answers, Nigerian officials pointed the finger at crypto exchanges, particularly Binance. The central bank, economic ministry, and even state security agencies accused them of enabling widespread manipulation of the Naira.

Facing Nigerian scrutiny, Binance executives weren't readily available. State officials had to request a meeting with them, highlighting the lack of a local presence. Binance firmly denied any role in Nigeria's currency crisis, claiming they had no impact on the market.

Undeterred, the Nigerian government formed a powerful investigative team. Led by the Economic and Financial Crimes Commission and working with security advisor Nuhu Ribadu, the committee aimed to expose those manipulating the Naira. Their first move? Blocking access to Binance and other crypto exchange websites in Nigeria.

Binance wasn't officially registered in Nigeria. Instead, they operated indirectly through a network of affiliate agents and marketers.

Binance sent Tigran Gambaryan, a former US Internal Revenue Service special agent, and Nadeem Anjarwalla, a lawyer educated at Oxford and Stanford who served as their Africa regional manager based in Kenya.

The February 28 meeting proved fruitless, ending in a stalemate. However, the story took a dramatic turn when Nigerian authorities detained both men in a guest house near the National Security Adviser's office. Their passports and phones were confiscated, and authorities obtained a court order to hold them in custody for two weeks.

Nigerian authorities ramped up the pressure after detaining the Binance executives. Officials demanded information about prominent crypto users on the platform, but both men refused, claiming they lacked the authority to disclose such details.

The situation escalated further when Nigeria's parliament summoned Binance CEO Richard Teng to appear before a legislative committee. However, Teng remained silent, at least publicly.

Meanwhile, Binance delisted the Nigerian naira from its supported currencies and halted all services for Nigerian users. This came after the initial two-week detention order for the Binance executives expired on March 12. However, Nigerian authorities extended their custody. The Economic and Financial Crimes Commission (EFCC) won a court order compelling Binance to surrender customer data for its Nigerian users, marking a victory for investigators.

Nigerian authorities point the finger at Binance, accusing the unlicensed exchange of two major offenses. First, they claim Binance played a role in the naira's dramatic devaluation over the past year. Second, they allege the platform facilitated the inflow of a staggering $26 billion in illegal funds.

The focus on Binance comes in the wake of Nigeria facing a growing crisis as food shortages and rising living costs fuel social unrest. Across the country, people have been storming grain warehouses in a desperate attempt to access food. This follows a surge in food prices, with inflation exceeding 35% earlier this year, the highest in decades.

The situation has become so dire that the government has deployed security forces to guard warehouses in the capital, Abuja. Earlier this month, an angry mob attacked a storage facility, emptying it of grain and causing significant damage. The looting continued for hours before police intervened.

President Bola Tinubu's economic reforms, implemented last year, have exacerbated Nigeria's food crisis. These reforms included cutting fuel subsidies and allowing the naira currency to fluctuate freely. While aimed at economic improvement, they've had a harsh impact.

Nigeria's inflation rate hit a two-decade high in January 2024, jumping to 29.90% compared to 28.92% in December 2023. This significant increase points to a worsening economic situation in the country. (IPA Service)

The Northlines is an independent source on the Web for news, facts and figures relating to Jammu, Kashmir and Ladakh and its neighbourhood.

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