- National security concerns drove Nigeria’s fight with Binance, minister says.
- Binance is facing multiple criminal cases in Nigeria.
- The government wants to fine Binance $81 billion.
In an escalation of Nigeria’s long running legal clash with Binance, a government minister said Thursday that terrorists and kidnappers funnelled funds through crypto transactions on the platform.
“We stumbled on evidence linking the operations of Binance and these criminal elements ― terrorists and their like,” Alhaji Mohammed Idris, the government’s Minister of Information, told DL News in an exclusive interview.
“We were having our own fear of insecurity exacerbated by operations of Binance.”
The development appears to ratchet up the legal pressure on the world’s biggest crypto exchange as it faces three cases.
In two criminal matters, Binance has been charged with facilitating money laundering and tax evasion. In a separate case, the tax authority alleges the company owes the Nigerian government a staggering $81 billion in “lost economic activity.”
All three matters are scheduled to come to trial soon.
Binance has pleaded not guilty and denied the allegations in the two criminal cases, and has not commented on the $81 billion matter.
A company representative did not comment on Alhaji Idris’ statements but told DL News the exchange would provide possible updates.
In the interview, Alhaji Idris said the government was spurred to take action against Binance after investigators found evidence that terrorists, insurgents, and kidnappers were allegedly funnelling illicit funds through Binance to foment violence in Nigeria.
“If you see a flow of finance between somebody who is purportedly doing financial transactions in your land and then people who are engaged in acts of destabilisation, certainly this will be of interest,” he said.
US case
In 2023, Binance pleaded guilty to violating US banking law by failing to prevent and report suspicious transactions on the platform by terrorist groups, including Hamas, Al Qaeda, and Isis, as well as criminals.
Binance paid a $4.3 billion settlement in that case.
Nigeria, Africa’s most populous nation, has long struggled with political violence.
But over the last decade, militant groups such as Boko Haram and ISWAP, Islamic State’s West Africa group, have committed wholesale kidnappings along the nation’s highways and killings in rural villages.
More than 600,000 Nigerians were killed, and 2.2 million were kidnapped in a 12-month period ending in April 2024, according to the National Bureau of Statistics. Victims and their families paid kidnappers more than $1.4 billion in ransom payments.
Militants use crypto accounts to receive illicit cash, and Nigerian officials believed their legal offensive on Binance was needed to stem the tide, said Alhaji Idris.
Devalued currency
When the legal trouble started last February, Nigerian officials emphasised the damage Binance was allegedly wreaking on the naira by letting speculators undermine its value.
The fiat currency lost 90% of its value against the dollar in eight months ending in February 2024 and officials appeared to largely blame Binance for the fall.
Binance denied repeatedly that the platform was responsible for devaluing the naira.
Moreover, in May CEO Richard Teng accused Nigeria of trying to shake down the company for a $150 million bribe to make its problems go away.
The Ministry of Information said the allegation “lacked substance.”
By then, the government’s state security agency had detained two Binance executives, Tigran Gambaryan and Nadeem Anjarwalla, after they arrived for talks in February with officials.
Gambaryan is the US-based head of Binance’s financial compliance unit, and Anjarwalla is a British lawyer and the platform’s Africa regional manager based in Nairobi, Kenya.
The negotiations broke down after the Binance executives rebuffed requests to hand over customer and transaction details to investigators. Nigeria’s state security officials detained the pair in a state-run guest house.
Anjarwalla managed to escape in March, and Gambaryan was subsequently charged with money laundering alongside his employer, Binance.
Gambaryan was detained in Kuje Prison for seven months. Kuje Prison is notorious for holding suspected terrorists.
The finance minister said the Interpol Red Notice against Anjarwalla for escaping detention in Nigeria is still in effect.
In October, Gambaryan finally regained his freedom after the Biden administration persuaded Nigeria’s government to release him on humanitarian grounds. Proescutors dropped their charges against him.
Gambaryan had suffered multiple illnesses while in jail, including malaria, pneumonia, and an exacerbation of a back problem that almost left him bedridden.
The Binance trials in Nigeria are expected to resume in April, but the proceedings so far have been marred by several mishaps and procedural delays.
Osato Avan-Nomayo is our Nigeria-based DeFi correspondent. He covers DeFi and tech. Got a tip? please contact him at osato@dlnews.com.