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Nigeria’s arrest of a Binance employee stems from allegations of a bribe demand

On a trip to Nigeria in January, Tigran Gambaryan, compliance officer for giant cryptocurrency exchange Binance, received disturbing news: the company had 48 hours to make a payment worth around $150 million in cryptocurrencies.

Mr. Gambaryan, a former U.S. law enforcement official, interpreted the message as a request for a bribe from someone in the Nigerian government, according to five people familiar with the matter and messages reviewed by The New York Times. He and a group of his Binance colleagues had just met with Nigerian lawmakers who accused the company of tax violations and threatened to arrest its employees.

Binance officials fled Nigeria in panic. Later that month, Mr. Gambaryan wrote a three-page report describing the payment request and handed it over to Binance’s lawyers, two people familiar with the report said. He also alerted contacts in the Nigerian government, the people said, and told them about the incident.

The episode formed the backdrop for a second trip to Nigeria that Mr. Gambaryan made in February. Upon his return, he and a colleague, Nadeem Anjarwalla, were arrested by Nigerian authorities, sparking a crisis at Binance.

Mr. Gambaryan was held in Kuje Prison in the Nigerian capital, Abuja, after being moved there from a government compound on April 8. His case is the latest legal trouble for Binance, which has agreed to one $4.3 billion fine last year to resolve U.S. government allegations that it had allowed criminal activity to thrive on its platform. In April, company founder Changpeng Zhao was present sentenced sentenced to four months in prison for his involvement in these violations.

Nigerian authorities have charged both Binance and Mr. Gambaryan with tax evasion and money laundering. Binance has disputed that Mr Gambaryan had any “decision-making authority” in the company.

“The message from the Nigerian government is clear,” Binance CEO Richard Teng wrote in a blog post on Tuesday. “We must arrest an innocent mid-level employee and former US federal agent and put him in a dangerous prison to control Binance.”

Zakari Mijinyawa, a spokesman for Nigeria’s national security adviser, said in a text that the Nigerian government would present its arguments “based on the facts and evidence and in accordance with due process.”

“We are confident that Nigeria has a good case,” Mr Mijinyawa said. “Binance will equally have every opportunity to make its case and ensure justice under the rule of law.”

In the blog post, Mr. Teng explained the history of Binance’s involvement in Nigeria, which has become a hotspot for the crypto industry. It has that second highest rate According to Chainalysis, a data firm, crypto adoption in the world lags behind India.

In 2023, Nigerian financial regulators issued a statement ordering Binance to stop soliciting investors in Nigeria. Binance has stopped advertising in the country and offered a meeting with government officials, Mr. Teng said.

But tensions continued to escalate. In recent months, Nigerian officials have argued that trading on Binance contributed to the collapse of the national currency, the naira. And in December, a Nigerian House of Representatives committee demanded that Binance representatives appear at a hearing.

On January 8, Mr. Gambaryan and a group of Binance employees met with these lawmakers. The meeting soon turned controversial: lawmakers read aloud a list of allegations against Binance, including tax violations. They also threatened to obtain an arrest warrant for Mr. Teng, the blog post said.

As Binance employees left the meeting, Mr. Teng wrote, they were approached by “unknown persons” who suggested they make a payment to settle the allegations. Later, a local lawyer representing Binance spoke with someone purported to be a House committee agent, Mr. Teng wrote.

The alleged agent demanded “a significant cryptocurrency payment to be made secretly within 48 hours to resolve these issues,” Mr. Teng wrote. The amount was about $150 million, four people familiar with the matter said.

“Our team became increasingly concerned about their safety in Nigeria and left immediately,” Mr. Teng wrote in his post. “We naturally rejected the request for payment through our lawyer because we did not see it as a legitimate settlement offer.”

After leaving Nigeria in January, Mr. Gambaryan discussed the incident with colleagues and distributed his report describing the demand for payment, two people familiar with the matter said.

Later that month, Mr. Gambaryan began organizing meetings with Nigerian security and financial crime officials. At the time, he noted that senior leaders in the Financial Crimes Bureau were eager to discuss what happened during the Jan. 8 meeting, a person familiar with the conversations said.

Dele Oyewale, a spokesman for the Nigerian Financial Crimes Commission, declined to comment on the payment request in a text message last month. He did not respond to a request for comment on Monday.

In his post on Tuesday, Mr. Teng wrote that Binance had received assurances that Mr. Gambaryan would be safe when he returned to Nigeria. A business consultant with close local ties recommended that Binance officials meet with the office of Nigeria’s national security adviser, Mr. Teng wrote.

Mr. Gambaryan and Mr. Anjarwalla arrived for this meeting on February 26th. After a few hours of discussion, Mr. Teng wrote, a Nigerian financial crimes official took Mr. Gambaryan aside and told him that “everything was progressing well.”

Various Nigerian officials then entered the room and demanded that Binance provide detailed information about its users in Nigeria – a request that the company refused to comply with. Mr Gambaryan and Mr Anjarwalla’s passports were confiscated and the two men were held in a secure compound for three weeks. On March 22, her attorneys received word that criminal charges would be filed.

Mr. Anjarwalla escaped the next day. He left Nigeria and has not spoken publicly since.

Mr. Gambaryan was alone on the premises. Shortly after his arrival, financial crime officials in Nigeria sent a message to the U.S. Embassy in Abuja, according to a copy of the message seen by The Times.

“It is important to emphasize that Mr. Tigran is currently in discussion with our team and that his stay is solely for the purpose of constructive dialogue,” the letter said. “We assure you that the person will participate willingly.”

Mr. Gambaryan was soon transferred to Kuje, a notorious facility where the Islamic State staged a prison break in 2022.

A trial was scheduled to begin last Thursday, but the court postponed it to May 17.

Julian E. Barnes and Glenn Thrush reported from Washington and Sunday Isuwa reported from Abuja, Nigeria.

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