This morning, Binance's head of financial crime compliance, Tigran Gambarian, appeared in Nigeria's Federal High Court on charges of tax evasion.
For anyone working in the burgeoning field of crypto tracing, from law enforcement officials to analytics firms like Chainalysis and TRM Labs, Gambarian is a star. He helped pioneer the field during his time as a U.S. Special Agent with the Internal Revenue Service, working on high-profile cases such as the Silk Road takedown and the child pornography platform Welcome to Video. And for the past month, he has been held by Nigerian authorities as a de facto hostage in the conflict between the Nigerian government and Binance.
The events of his arrest and imprisonment seem to have already been ripped from a spy movie. In late February, after the Nigerian government blamed Binance for the ongoing currency crisis, Gambarian flew to Abuja for a short trip with his colleague Nadeem Anjarwala at the invitation of government officials. After meeting with regulators and officials, the two employees were escorted to a hotel, taken to a secured home, and told they could not leave.
Although the episode made international headlines, the detention appears to be fairly innocuous, as Gambariyan and Anjalwala were allowed to use cell phones and there were reports of a housekeeper making them green juice smoothies. Ta. That all changed last week when Anjalwala staged a dramatic escape, using a hidden passport to sneak out after persuading security guards to attend prayers at an adjacent mosque. On the same day, the government filed four new charges against the two officials and is coordinating with Interpol over possible extradition (Mr. Anjalwala's whereabouts are unknown).
Meanwhile, a family spokesperson said Gambarian's condition had worsened since the incident, but warned that the situation would likely have worsened regardless of Anjalwala's escape. Gambarian was unable to contact friends and family by cell phone and was transferred from the guardhouse to a detention center, which a spokesperson described as a solitary confinement cell. There are concerns that Gambarian will be transferred to prison, where his safety will be further at risk. “That escalation is so prevalent,” she said.
Over the past month, it has become clear that Gambariyan and Anjarwala are pawns in the Nigerian government's efforts to collect huge fines from Binance, with authorities predicting that Binance will lose $26 billion in 2023. They are accused of illegally leaking it out of the country. Fines against the platforms could be up to $10 billion, more than double the amount of a recent settlement with the U.S. government.
Whether Binance is guilty of tax evasion or currency manipulation is another question, but the pressing issue here is whether Gambarian is being used as a bargaining chip. According to a statement shared by a Binance spokesperson, who declined to comment further, Gambarian's team responded to more than 600 requests for information from Nigerian law enforcement officials. The company has provided multiple training sessions to the public. According to the statement, he has “no decision-making authority within the company.” Gambarian's imprisonment reflects an alarming trend in hostage-taking laws, which use corporate employees as leverage.
Perhaps more worrying is the lack of response from the US government. Of course, Binance is no friend of U.S. politicians and officials, especially in the wake of November's criminal enforcement action. Still, Gambarian's spokeswoman said her wife, Yuki, had contacted the U.S. embassy, State Department and senators and received what she described as her “limited involvement.” Ta. Another person working on the case, who requested anonymity to speak freely, said there had been “no action” from the U.S. government.
Mr. Yuki recently reached out to Sen. Cory Booker (D.N.J.) and Rep. Sarah Jacobs (D-Calif.), who led a congressional delegation to Nigeria to discuss democracy and freedom. When I contacted Mr. Booker's office, a spokesperson told me that the delegation had already left Abuja before hearing from the family. We also contacted the State Department, but received no response.
For now, Gambarian's situation is becoming more dire by the day. At today's hearing, the judge adjourned his case until April 19th, while another hearing against Binance Inc. was postponed until April 8th. Gambarian's lawyer, Mark Moldy, sued to prevent his client from pursuing charges on Binance's behalf, arguing that due process was not followed. According to Bloomberg, his employer. “The world is watching us. Let's stop treating this issue as a trivial issue,” Mordi said.
leo schwartz
leo.schwartz@fortune.com
@leomschwartz
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