Despite the soaring price of Bitcoin, the world's largest cryptocurrency exchange Binance is not having an easy time.

Recently, the Financial Crimes Committee of the Nigerian House of Representatives summoned Binance's current CEO, Richard Teng, to attend a hearing, accusing him of being involved in financial crimes such as financing terrorism and money laundering. Correspondingly, Nigeria is currently facing its most serious currency crisis in nearly thirty years. Since the Nigerian central bank delinked the official currency, the Naira, from the US dollar in June last year to attract foreign exchange inflows, the official currency has depreciated by about 70% in the past year, making it the worst-performing currency globally.

The exchange rate of the US dollar to the Naira has been continuously rising over the past year, source: First Financial

In response, Nigerian authorities believe that Binance has played a significantly negative role in this situation. Of course, this matter is not without basis.

Faced with the rapid inflation causing currency devaluation and outflows, Nigeria had previously implemented quite aggressive foreign exchange controls. Faced with no other choice, two-thirds of Nigeria's population living below the poverty line turned to embrace cryptocurrency, exchanging Naira for stablecoins pegged to the US dollar to safeguard their wealth from further dilution. According to an index compiled by Chainalysis, the country's cryptocurrency adoption rate ranks second in the world, only behind India. In the 12 months leading up to June 2023, Nigerians received approximately $60 billion worth of cryptocurrency transactions.

Source: Chainalysis

Against this backdrop, the P2P stablecoin market, which enables peer-to-peer transactions, has become a gray market that surpasses the domestic currency market. The exchange rate between the Naira and the US dollar on this platform is significantly lower than the official rate set by the Nigerian government, and the majority of transactions occur on Binance, the world's largest platform. Olayemi Cardoso, the governor of the Central Bank of Nigeria, stated last month that in just the past year, Nigeria has seen $26 billion transferred through Binance from "unidentifiable sources and users."

Presidential advisor Bayo Onanuga responded on X platform, "Binance is facing regulation in many countries and causing chaos in the currency market. It should not be allowed to determine the value of the Naira on its own cryptocurrency trading platform. Cryptocurrency should be banned in our country, otherwise our currency will continue to bleed." As early as June last year, the Nigerian Securities and Exchange Commission accused Binance of illegal operations in the country.

On February 24, the largest country in Africa with a population of 240 million people has requested its domestic telecommunications companies and other internet service providers to block access to cryptocurrency trading platforms. Subsequently, Binance urgently announced the suspension of the exchange between the Naira and Bitcoin and USDT.

According to BBC, Nigerian authorities have demanded that Binance pay at least $10 billion in compensation, a rumor that has been denied by Nigerian authorities. However, it is interesting to note that former President Bola Tinubu previously announced that the federal government plans to raise at least $10 billion to increase the liquidity of foreign exchange. According to the Financial Times, the Nigerian National Security Advisor's office has requested Binance to address unpaid taxes. Currently, Nigeria is exerting pressure on Binance, demanding the personal information of the top 100 Nigerian users and all transaction records from the past six months.

More importantly, two Binance executives have been unreasonably detained since their arrival in Nigeria on February 25, approaching three weeks, which undoubtedly adds more pressure to Binance. Although Binance claims to be making every effort to bring their colleagues back home, the current situation suggests that it is not that simple. The involvement of these two foreign executives has forced the involvement of the foreign ministries of the United Kingdom and the United States, further complicating the situation.

The foreign media WIRED conducted a detailed investigation and interviews with the detained individuals, and the following is a summary of their report.

Tigran Gambaryan, a former investigator with the US Internal Revenue Service, who had led operations to capture cryptocurrency fraudsters and money launderers, as well as dismantle child exploitation networks funded by cryptocurrency on the dark web, had never expected that after taking on the role of Binance's head of financial crime compliance, he himself would become a target of a cryptocurrency crackdown in a certain country: for over two weeks, he and another Binance executive have been forcibly detained by Nigerian officials.

Since February 26, Gambaryan and Nadeem Anjarwalla, Binance's regional manager for Africa based in Kenya, have been deprived of their passports and detained in a government property in the Nigerian capital, Abuja. According to their families, neither of them has been informed of any criminal charges against them. The Financial Times reported that as the Nigerian national currency significantly depreciated, Nigeria took widespread action to ban cryptocurrency exchanges, and these two individuals were caught up in this action.

Gambaryan's wife, Yuki, said, "We have no clear answers about how he is doing, what will happen to him, or when he will come back."

Gambaryan is a US citizen, while Anjarwalla holds dual citizenship of the UK and Kenya. Their families mentioned that at the invitation of the Nigerian government, the two arrived in Abuja on February 25 to resolve the dispute between Nigeria and Binance. The next day, they met with Nigerian officials to discuss the government's order for the country's telecommunications companies to block access to Binance and other cryptocurrency exchanges, with regulatory agencies accusing Binance of causing the devaluation of the official Nigerian currency, the Naira, and facilitating "illegal capital flows."

However, according to sources, shortly after Gambaryan and Anjarwalla's first meeting with the Nigerian government, they were taken to a hotel, asked to pack their bags, and transferred to a "guesthouse" managed by the Nigerian National Security Agency. Their passports were confiscated, and against their will, they were detained in this house, where they have been held for two weeks.

Their families mentioned that a US State Department official visited Gambaryan, while a representative from the UK Foreign Office visited Anjarwalla, but Nigerian government guards were always present and prevented them from speaking privately.

In response, a Binance spokesperson declined to comment on the charges against the two men or the company itself, or any demands the Nigerian government might make to release them. The Binance spokesperson stated, "While we cannot currently comment on the substance of the allegations, we can say that we are working with the Nigerian authorities to do everything we can to safely bring Nadeem and Tigran back home to reunite with their families. They are the most honest professionals, and we will provide them with all the support we can, and we believe this matter will be resolved quickly."

Last week, after Anjarwalla fell ill, the two were transferred to a local hospital. His wife mentioned that his specific symptoms were unclear, but it could have been malaria. However, he later recovered, and the two were returned to the Nigerian government building and have been detained there ever since.

For Gambaryan, becoming a pawn in the dispute between Binance and the government is clearly an ironic turn of events. Gambaryan was recruited with great fanfare as the head of Binance's compliance investigation team in 2021, widely seen as an effort to clean up the exchange's illicit money flows, better comply with regulations, and work more closely with law enforcement. At the end of November last year, Binance agreed to a record $4.3 billion settlement with US prosecutors for alleged money laundering and accepted strict scrutiny from US regulators.

Before joining Binance, Gambaryan served as an investigator in the Criminal Investigation (IRS-CI) division of the US Internal Revenue Service, where he gained a reputation in law enforcement for leading high-impact cryptocurrency cases. From 2014 to 2017 alone, Gambaryan led investigations that involved corrupt federal agents stealing cryptocurrency from the Silk Road dark web drug market and selling law enforcement intelligence to its creator, tracking 650,000 bitcoins stolen from the Mt. Gox exchange, and assisting in developing encryption tracking technology to locate servers operating the large-scale AlphaBay criminal market, which was involved in dismantling the cryptocurrency-based child exploitation network Welcome to Video.

Former prosecutor Will Frentzen, who worked closely with Gambaryan, described him as a "very upright" and "top-notch agent" during his time at the IRS-CI. Frentzen said, "He was involved in what were arguably the biggest cryptocurrency cases at the time. He was innovative in his investigations, and few people could match his investigative methods. He was also very selfless in sharing credit for contributions to cases. I believe no one else has had a greater impact on related cryptocurrency investigations than him."

Gambaryan's wife, Yuki, pointed out that her husband has won the support of the US government, and the US government is now helping negotiate his freedom. She said, "He has done a lot of good for this country in his career. I believe it's time for him to receive the same amount of support from his country." However, she is not aware of any specific actions taken by the US State Department or the US Embassy in Abuja to rescue Gambaryan.

Anjarwalla is a government affairs specialist at Binance, a graduate of Oxford University and Stanford University, and joined the cryptocurrency company a year ago. In a statement, his wife, Elahe Anjarwalla, wrote that he is only a mid-level manager at Binance and does not have decision-making authority. She also mentioned that Anjarwalla is a Muslim and has been detained during Ramadan; their young son has grown his first tooth in the past two weeks, and the child will turn one year old next week. "Anjarwalla is a loving husband and father, he is my best friend, and I just hope he can come back to us."

Yuki said, "The two detainees can watch TV and go out on the balcony, and I can see that he is trying to maintain a positive attitude, but this has had a significant impact on him, and he is becoming impatient and feeling desperate."

For Gambaryan's wife herself, the anxiety and uncertainty of the past two weeks have been "the most difficult days of her life," and she has not told their two young children. Yuki said, "I just ask them to let him go." According to the latest information, these two executives cannot leave until at least the follow-up hearing held on March 20.

On the other hand, in addition to the frequent turmoil in Nigeria, US authorities recently imposed travel restrictions on former CEO Zhao Changpeng (CZ). According to court documents filed on March 11, CZ must notify the Pretrial Services Department before traveling between states within the US, and he must also surrender his current Canadian passport to a third-party custodian under the supervision of a lawyer, as well as surrender "all other valid and expired passports and travel documents." Without court permission, he is also prohibited from applying for new passports or travel documents "from any country."

In summary, CZ must and can only stay in the US, his freedom is further restricted, and the previously scheduled criminal judgment has been postponed from February to the end of April, with US prosecutors seemingly considering a more severe sentence than the originally expected maximum of 18 months in prison.

Overall, Binance has faced numerous difficulties at the beginning of this year, with CZ possibly being imprisoned, and the new CEO having to face the first serious government negotiations since taking office. From a global perspective, the clash between the exchange's global exchange payment services and centralized government control has led to intense conflicts, especially in third-world countries where the currency is already struggling, and it is expected to escalate further in the future. This incident in Nigeria is likely just the beginning.

As for how to deal with such conflicts in the future, and how to resolve the inherent contradictions between the liberalized cryptocurrency economy and government central sovereignty, Binance, as a leader, will need to make more efforts to navigate through this uncertain situation.

References:

ANDY GREENBERG: Binance’s Top Crypto Crime Investigator Is Being Detained in Nigeria

Scott Chipolina, Aanu Adeoye: Nigeria pushes Binance for user data in stand-off over naira speculation

免责声明：本文章仅代表作者个人观点，不代表本平台的立场和观点。本文章仅供信息分享，不构成对任何人的任何投资建议。用户与作者之间的任何争议，与本平台无关。如网页中刊载的文章或图片涉及侵权，请提供相关的权利证明和身份证明发送邮件到support@aicoin.com，本平台相关工作人员将会进行核查。