Stakeholders In Nigeria Demand Transparency from Binance in Alleged Bribery Case

Stakeholders in Nigeria’s cryptocurrency sector are urging Binance, a major global cryptocurrency exchange, to disclose the identity of a Nigerian official allegedly involved in a bribery attempt and to provide evidence to support its claim.

This demand arises amid concerns that such allegations could tarnish the nation’s image and negatively impact its burgeoning crypto industry.

Bribery Allegation Raises Concerns for Nigeria’s Crypto Industry

The controversy began following an allegation by Binance that an attempt was made to bribe one of its officials. The situation has drawn attention to the broader implications for Nigeria’s reputation and its potential to attract international crypto businesses. Rume Ophi, the executive secretary of the Stakeholders in Blockchain Technology Association of Nigeria (SiBAN), highlighted the need for Binance to clarify the details of the incident. Ophi noted that revealing the individuals involved could validate the claim and help the authorities address any misconduct, thus safeguarding Nigeria’s standing in the global market.

The concerns were compounded by a statement from the Nigerian Securities and Exchange Commission (SEC) in 2023, declaring that Binance was not registered or regulated by it, and thus its operations were considered illegal within the country. This was further exacerbated when the governor of the Central Bank of Nigeria voiced suspicions on February 27 about illicit transactions involving crypto exchanges, specifically pointing to questionable fund flows associated with Binance.

Binance says it was asked for a large payment in Nigeria to make problems there "go away" https://t.co/gayt4ajAzY

— Bloomberg Africa (@BloombergAfrica) May 7, 2024

Nigerian Officials Escalate Pressure on Binance

The issue escalated further when Binance CEO Richard Teng was summoned to appear before the Nigerian House of Representatives Committee on Financial Crimes by March 4, following demands from Nigerian officials for Binance to take specific actions. These included delisting the Nigerian naira from its platform and providing extensive user data. These demands led to the detention of Tigran Gambaryan, a former U.S. Internal Revenue Service agent who led Binance’s financial crime compliance team, and his colleague Nadeem Anjarwalla.

During a May 6 meeting, the body language of the Nigerian SEC representative indicated the government’s willingness to support the crypto industry, despite the ongoing challenges. However, the subsequent detention of Gambaryan on May 7, after allegations of bribe attempts involving unidentified individuals, further complicated the situation. In a comprehensive explanation, Teng disclosed that the bribe proposal was made to an employee of the exchange to settle allegations.

Nathaniel Luz, CEO of Flincap, a liquidity platform for crypto exchanges, expressed skepticism about the involvement of any Nigerian official but agreed that identifying the specific individuals implicated would lend credibility to Binance’s allegations.

Binance Trial Postponed Amidst Serious Allegations

The trial of Binance and its executives in Nigeria, initially scheduled to commence earlier, was postponed and now is set to May 17. This delay was granted by a Nigerian court to allow Binance’s lawyers additional time to review documents crucial for their defense. The trial involves serious allegations against Binance and its executives, including money laundering and engaging in specialized financial activities without a license. These charges have added complexity to the legal proceedings, contributing to the postponement.

Furthermore, the broader implications of this case for Nigeria’s cryptocurrency market are significant, considering that Nigeria hosts Africa’s largest crypto economy. The case also highlights ongoing tensions between regulatory authorities and cryptocurrency platforms over compliance and operational legality​.