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Binance says Nigerian officials demanded bribes, sending wrong message to investors

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Binance says Nigerian officials demanded bribes, sending wrong message to investors

Richard Teng, Binance CEO, has claimed that some agents of Nigerian officials demanded secret payment to make its problems in the country “go away,” while noting that what he called “unjust detention” of the company’s employee, is sending the wrong message to potential investors.

Two employees of Binance, Tigran Gambaryan and Nadeem Anjarwalla are facing tax evasion charges in Nigeria after the country’s authorities detained them upon arrival into the country months ago.

However, while Nadeem escaped from custody, Tigran is still being held in Nigeria.

Meanwhile, Teng, who took over from founder and former CEO Changpeng Zhao, said in a blog on Binance’s website that the request was made through a local law firm it hired.

Giving the background of the arrest, Teng said Binance had in early December 2023, received a letter from the Chairman of the House Committee on Financial Crimes (HCFC) requesting that we appear at a public investigative hearing in less than two weeks, but managed to agree with the Committee that the hearing should be rescheduled to 10 January 2024, to provide a realistic timeline to prepare and send a delegation of Binance employees with expertise on the issues that were important to discuss.

According to him, Tigran Gambaryan and several other members of Binance team traveled to Nigeria to participate in this and other meetings.

“On January 5, Binance employees met with the NFIU to discuss information sharing as well as continued capacity building. The agreed next step was for the FIU to share a Memorandum of Understanding (MoU) setting out proposed terms and conditions for the sharing of anti-money laundering (AML)-related information,” he narrated.

“On January 8, Binance employees had a face-to-face meeting with three members of the HCFC and a clerk in Abuja at the House of Representatives building for a scheduled pre-hearing engagement in private. The meeting was chaired by the Honourable Peter Akpanke, the Honourable Philip Agbese, and the Honourable Peter Aniekwe, as well as a clerk.

“During the conversation, the Committee highlighted the important nature of the issues at hand and the lengths to which they were prepared to go to summon Binance, including issuing arrest warrants against our team and CEO and preventing our team from leaving the country. While concerning, it was understood that the HCFC does not in fact have the power to issue arrest warrants.

“The Committee confirmed that the public hearing would proceed on the 10th of January and that Binance would be afforded an opportunity to respond to any allegations publicly in the presence of the petitioners, press, and over 30 agencies.

“Despite multiple requests, Binance had still not received details of the allegations, and our employees, therefore, inquired if there was an opportunity to submit our responses in writing and in the absence of a public hearing. There were a number of reasons for that, including the sensitivity of the information and getting the opportunity to see the allegations in full and prepare a thorough substantive response. The meeting ended with the Chair confirming they would consider the matter and revert through Binance’s local counsel.

“However, as our employees were leaving the venue, they were approached by unknown persons who suggested to them to make a payment in settlement of the allegations. Later that day, our local counsel — representing us at that time — was summoned by the Committee through someone purporting to be their agent, who relayed the Committee’s terms and instructed our local counsel to advise us.

“Counsel reported back that he had been presented with a demand for a significant payment in cryptocurrency to be paid in secret within 48 hours to make these issues go away and that our decision was expected by the morning. Our team grew increasingly concerned about their safety in Nigeria and immediately departed. We, of course, declined the payment demand via our counsel, not viewing it to be a legitimate settlement offer, and clarified that we would engage in settlement negotiations on the following conditions:

* Binance needs to see the relevant petition and/or the details of all allegations.

* Any settlement must be official, recorded in writing, and signed by all relevant parties.

* Any settlement must encompass all relevant agencies and be in full and final settlement of all allegations, including any potential historic tax liabilities, if applicable, with guarantees.

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*While the exact terms of any settlement may have to remain private, there would have to be some public acknowledgment that a resolution has been reached.

* There should be no public hearing before the Committee.

*Our contractors and employees are not to be intimidated, harassed, or detained.

‘Tigran Gambaryan’s detention unjust’

Meanwhile Teng in the post, voiced his profound concern regarding what he said is “the unjust detention of one of its mid-level employees (who has no decision-making powers) by the Nigerian government.”

He complained that despite numerous efforts at constructive engagement and a willingness to meet the requests of Nigerian authorities, a completely innocent employee remains detained for spurious reasons.

 

“Over the past two and a half years, Binance has worked hard to restructure our organization and personnel and upgrade our systems. We have new leadership in place with deep compliance experience and impressive backgrounds ranging from top traditional financial institutions and leading tech companies, to law enforcement and major corporate entities,” he wrote.

“We continue to do anything and everything we can to support Tigran. This support is unwavering. Tigran did not go to Nigeria as a “decision-maker,” nor a “negotiator.” He was merely acting as a functional expert in financial crime and capacity building in policy discussions.”

He said Binance believes it’s an easy solution to let Tigran go home to his family and then Binance will work through the same process that they have done with Nigeria’s law enforcement community voluntarily more than 600 times in the past.

Teng continued, “We will work tirelessly with public and private partners to remove them. Furthermore, we will continue engagement with Nigeria’s Federal Inland Revenue Service (FIRS) on resolving potential historic tax liabilities.

“It remains unclear to me as to why this is not a solution to which the Nigerian government officials are willing to agree,” added Teng. “The Nigerian government has extraordinary power to determine the future of Binance and the broader crypto industry within its borders. At the end of the day, Binance wants to have a future where we work alongside the Nigerian government to be part of building a strong economy for the Nigerian people. But this crisis must come to a resolution quickly, and Tigran must be allowed to go home if we’re going to move forward.”

To invite a company’s mid-level employees for collaborative policy meetings, only to detain them, has set a dangerous new precedent for all companies worldwide, he noted.

Additionally, on 25 April, during a bail hearing for Tigran, the EFCC’s prosecutor said to the court, “The 1st defendant (Binance) is operating virtually. The only thing we have to hold on to is this defendant (Tigran).”

According to him, “the message from the Nigerian government is clear: we must detain an innocent, mid-level employee, a former U.S. federal agent and place him in a dangerous prison to control Binance. This regrettable turn of events contradicts the spirit of cooperation and transparency that Binance has consistently demonstrated in its interactions with the regulatory authorities.”

Teng further said, “Binance remains committed to embracing the opportunity that lies with taking an innovative approach to using digital assets and platforms but we also must build a future where we are seen, as we see ourselves, as good actors in the international community.

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“I’d like to express my deepest gratitude for the many notes of support we have received from around the world in response to this crisis and hope that my next update is one where our employees are safe at home with their families.”

 

 

 

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