On March 4, 2024, Nigerian officials brought a legal request to court seeking the trial of cryptocurrency exchange Binance and two of its executives on charges of money laundering and tax evasion. This request comes after a thorough criminal investigation into the activities of the trading platform in recent weeks. Nadeem Anjarwalla, the regional manager of Binance, is currently on the run after fleeing custody in late March. The only person present at the court hearing was Tigran Gambaryan, an American citizen who serves as the head of financial crime compliance for the company.
Nigeria has emerged as a hub for cryptocurrency trading in Africa, boasting the highest trade volume on the continent. Many Nigerians turn to cryptocurrency as a way to protect their finances from rising inflation and the devaluation of the local currency. Despite this, government officials have raised concerns about the potential misuse of the platform for illegal activities such as money laundering and terrorism financing. The Federal High Court in Abuja, Nigeria has brought forth charges against Binance and two officials for various offenses.
Anti-corruption agency and tax authority are leading the charges.
The accusations include operating without a license, illegal foreign exchange market dealings, tax evasion, and hiding the source of $35.4 million in illegal funds. The country’s anti-corruption agency and tax authority are leading the charges, as reported by The Associated Press on March 4, 2024. Gambaryan was carefully ushered into the courtroom and subsequently escorted out by representatives of the anti-corruption organization. Binance was not available for immediate comment. Ever since Gambaryan and Anjarwalla were taken into custody on February 26, their trial has been engulfed in a cloud of dispute following their allegations of unlawful detention and confiscation of their passports by the authorities.
Furthermore, there were reports in the local media stating that the Nigerian government had requested the identities of individuals involved in trading on the platform. Mark Mordi, the lawyer for Gambaryan, successfully argued in the Abuja court last week for an adjournment of the money laundering trial until April 8. He claimed that his client could not legally represent Binance in the case without the company’s explicit consent, a claim which was challenged by the public prosecutor.
Company has faced legal troubles and opposition from regulatory bodies.
Ekene Iheanacho, a lawyer representing Nigeria’s Economic and Financial Crimes Commission, claimed that there is evidence to suggest that the second defendant (Gambaryan) serves as a liaison for the first defendant (Binance) within this nation. Binance, a major player in the world of cryptocurrency, was established in 2017 by Changpeng Zhao, a talented developer with a background in high-frequency trading software. Originally located in China, the company later relocated to Japan in response to government regulations on cryptocurrency businesses.
More so, Binance is currently recognized as the leading global company in the cryptocurrency exchange market, boasting the highest daily trading volume of digital currencies. After departing from Japan, the company relocated to Malta where it now operates without a designated official headquarters. It has faced legal troubles and opposition from regulatory bodies since its inception. This has led to bans on operating in certain countries, as well as fines being imposed. There have also been accusations that Binance may be facilitating the financing of terrorist organizations.
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Additionally, the company admitted to money laundering, operating without a license, and violating sanctions in a U.S. federal court in November 2023. Established in 2017 in China, the company swiftly relocated its servers and main office outside the nation to avoid the cryptocurrency trading ban enforced by the Chinese government in September of the same year. Zhao invited He to join Binance, and together they collaborated on revising sections of the white paper for Binance’s successful $15 million initial coin offering.
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