How a Crypto Compliance Officer Ended Up in a Nigerian Jail

When he flew to Nigeria for a enterprise journey in late February, Tigran Gambaryan, a prime compliance officer on the cryptocurrency change Binance, packed a small suitcase with simply sufficient garments for 2 days.

A former U.S. regulation enforcement agent, Mr. Gambaryan knew the journey was dangerous. Only some weeks earlier, he and a bunch of colleagues had rushed out of Nigeria, involved that the native authorities would possibly detain them, 5 individuals aware of that journey mentioned. This time, he assured his spouse, he would “get in and get out.”

A month and a half later, Mr. Gambaryan is being held at Kuje jail within the Nigerian capital of Abuja, a posh that has housed Islamic State militants and Boko Haram fighters.

After assembly with authorities officers in Abuja on Feb. 26, Mr. Gambaryan, 39, and a Binance colleague, Nadeem Anjarwalla, have been abruptly escorted to a guesthouse managed by Nigerian safety officers, the place they have been held for practically a month with no formal costs filed towards them.

Then, late final month, Mr. Anjarwalla, the corporate’s regional supervisor for Africa, escaped underneath mysterious circumstances. Preliminary experiences prompt he had fled Nigeria after guards permitted him to depart the guesthouse for Ramadan prayers.

Inside days of the escape, the Nigerian authorities charged Mr. Gambaryan, Mr. Anjarwalla and Binance itself with tax evasion and cash laundering — successfully accusing the corporate and two midlevel staff of the identical crimes.

This account of Mr. Gambaryan’s detention in Nigeria is predicated on interviews with Nigerian officers, crypto compliance consultants and a dozen different individuals with information of the scenario, a lot of whom requested anonymity to debate a legally delicate matter.

In an April 3 assertion, Binance denied that Mr. Gambaryan had any “decision-making energy” within the firm and mentioned that he shouldn’t be “held accountable whereas present discussions are ongoing between Binance and Nigerian authorities officers.”

A Binance spokesman, Brad Jaffe, mentioned the corporate had “nice respect” for the Nigerian authorities and remained engaged in “good religion discussions in any respect ranges.”

Mr. Gambaryan’s arrest is the newest flashpoint in years of authorized troubles for Binance, the world’s largest crypto change. The corporate is making an attempt to rebuild after it agreed to pay $4.3 billion in penalties final yr to settle costs by a number of U.S. companies that it violated financial sanctions towards Syria, Cuba and Iran whereas permitting legal exercise to flourish on its platform.

The case additionally reveals how the crypto business, constructed on know-how that was initially designed to bypass the worldwide monetary system, continues to be struggling to remain on the precise aspect of regulation enforcement in international locations world wide. In November, Binance’s founder, Changpeng Zhao, stepped down as chief govt and pleaded responsible to cash laundering violations in america.

Binance changed Mr. Zhao with Richard Teng, a former Singaporean regulator, and continued to function worldwide, however with a smaller workers after it laid off 3,000 of its practically 8,000 staff final yr.

Across the time of the management change, Binance was working with the Nigerian authorities, hoping to collaborate on efforts to watch crypto transactions for monetary crime. However these discussions deteriorated as Nigerian officers voiced suspicions that Binance was committing among the identical crimes that america had investigated.

With one of many largest economies in Africa, Nigeria has lately develop into a scorching spot for digital currencies: It has the second-highest price of crypto adoption on the planet behind India, in keeping with Chainalysis, a knowledge agency. Some Nigerians have turned to crypto as an alternative choice to the native forex, which has depreciated considerably over the previous two years.

Mr. Gambaryan, a weight lifter who practices martial arts in his spare time, spent his early childhood in Armenia earlier than transferring to Fresno, Calif. as a preteen. He now lives exterior Atlanta along with his spouse and two younger kids.

Binance employed Mr. Gambaryan to work on compliance points in 2021 and ultimately made him the top of its monetary crime compliance crew.

By the point he traveled to Nigeria, Mr. Gambaryan had develop into one of many firm’s most acknowledged staff exterior its govt suite. He spoke at conferences, used his pedigree as a former regulation enforcement officer to assist recast Binance as a law-abiding monetary agency and met with authorities officers world wide. He appreciated to recount his years as a legal investigator for the Treasury Division, the place he was a part of the crew that investigated crimes linked to the Silk Highway, a darkish net market. His buddies and colleagues described him as fearless and pleased with his authorities service.

In early January, Mr. Gambaryan was a part of a delegation of Binance staff that traveled to Abuja for conferences with Nigerian officers, who have been involved that the corporate was evading taxes and violating anti-money laundering guidelines.

The journey quickly turned scary, six individuals aware of it mentioned. On Jan. 8, Binance’s delegation met with a bunch of Nigerian legislators, who learn aloud an inventory of accusations towards the corporate, together with tax violations, three of the individuals mentioned. The Binance delegation requested how they might resolve the federal government’s issues.

Peter Aniekwe, a Nigerian lawmaker who attended the assembly, mentioned in an interview that he and his colleagues informed Binance’s staff to talk with the Nigerian tax authority about how a lot the corporate owed.

Then one of many lawmakers prompt that the delegation was vulnerable to detention. “We informed them that it’s higher to settle or they may not depart Nigeria,” Mr. Aniekwe mentioned.

It was meant to be an informal remark, Mr. Aniekwe mentioned, and never an express menace, since legislators don’t have any energy to arrest anybody.

Nonetheless, the staff have been alarmed. That evening, a neighborhood Nigerian lawyer who was working with Binance informed the delegation that the price of settling the corporate’s authorized issues in Nigeria might exceed $100 million, three individuals aware of the talks mentioned.

Fearing for his or her security, Mr. Gambaryan and his colleagues lower the journey quick and flew out of Nigeria, the individuals mentioned.

Only a month and a half later, although, Mr. Gambaryan went again.

The choice-making amongst Binance officers in regards to the return journey was muddled, and it wasn’t clear who made the ultimate name. Mates and colleagues pleaded with Mr. Gambaryan to not go, three individuals aware of these discussions mentioned. He responded that he felt a way of obligation to return, and that he thought he might mend relations with the Nigerian officers, an individual aware of his considering mentioned.

The controversy reached Binance’s prime executives, an individual aware of the discussions mentioned. Earlier than Mr. Gambaryan left, Binance acquired assurances from native officers that he could be secure, the particular person mentioned, and the corporate employed a safety agency to assist him navigate Abuja.

However tensions have been rising. Just a few days earlier than Mr. Gambaryan’s return journey, Bayo Onanuga, an adviser to Nigeria’s president, accused Binance of facilitating buying and selling that had contributed to the collapse of the naira, the nation’s forex.

Just one different Binance worker traveled with Mr. Gambaryan — Mr. Anjarwalla, who had additionally been a part of the January delegation. On Feb. 26, they met with officers from Nigeria’s monetary regulators and different authorities companies. Binance didn’t ship any legal professionals to accompany them, an individual aware of the assembly mentioned.

The discussions turned hostile. The Nigerian officers needed Binance to show over knowledge for a big swath of its clients, a requirement that the corporate was unwilling to satisfy, three individuals aware of the talks mentioned.

Just a few hours later, Nigerian officers escorted Mr. Gambaryan and Mr. Anjarwalla to their lodge and ordered them to pack their baggage, in keeping with their households. Then they have been taken to the guesthouse — a safe compound close to the headquarters of Nigeria’s nationwide safety adviser. “You’re our visitor now,” a Nigerian official informed them, in keeping with an individual aware of what occurred.

The Nigerian authorities confiscated Mr. Gambaryan’s and Mr. Anjarwalla’s passports, however they have been in a position to hold their telephones, permitting them to speak with household and colleagues. No legal costs have been filed, although a neighborhood court docket issued an order allowing the authorities to detain Mr. Gambaryan and Mr. Anjarwalla pending an investigation.

For weeks, they stayed in a piece of the home that included two bedrooms, a lounge and a kitchen. Guards holding AK-47s have been stationed close by, an individual aware of the matter mentioned.

Talking to the BBC in early March, Mr. Onanuga, the presidential aide, mentioned Nigeria’s authorities was demanding near $10 billion from Binance “in retribution as a result of they actually tousled our financial system in a really quick time.” (In an interview with The New York Occasions, Mr. Onanuga mentioned he had meant that Binance “might” should pay such an quantity, and that he had been speculating in regards to the measurement of a possible superb.)

On March 22, legal professionals for Mr. Gambaryan and Mr. Anjarwalla discovered that Nigeria was making ready to cost the 2 males personally with legal violations, as a part of its case towards Binance, in keeping with their households. The subsequent morning, Mr. Gambaryan woke as much as uncover that Mr. Anjarwalla was lacking, an individual aware of the matter mentioned.

How Mr. Anjarwalla managed to flee was unclear. An area newspaper reported that Mr. Anjarwalla, who has twin nationality in Kenya and Britain, had used his Kenyan passport to depart Nigeria after handing over his British one. The guards led him to a close-by mosque for Ramadan on March 22, the report mentioned, earlier than he by some means slipped away.

A consultant for Mr. Anjarwalla mentioned he left Nigeria “by lawful means.” A spokesman for Nigeria’s nationwide safety adviser mentioned the nation’s safety companies have been working to acquire a world arrest warrant for him.

“The personnel answerable for the custody of the suspect have been arrested,” the spokesman mentioned.

After the escape, the Nigerian authorities confiscated Mr. Gambaryan’s telephone. On March 25, he, Mr. Anjarwalla and Binance have been charged with cash laundering, tax evasion and different crimes. A choose ordered Mr. Gambaryan to be taken to Kuje, the place the Islamic State staged a dramatic jail break in 2022 to free tons of of its fighters.

Mr. Gambaryan’s household, buddies and colleagues have been lobbying U.S. officers to safe his launch. “They should make it clear that this sort of injustice shouldn’t be tolerated,” Mr. Gambaryan’s spouse, Yuki, mentioned in an interview.

A White Home official, who requested anonymity to debate delicate diplomatic points, mentioned the administration was working with the U.S. embassy in Nigeria to resolve the scenario.

Mr. Gambaryan has legal professionals representing him in Nigeria and is scheduled to look in court docket for a bail listening to on Monday, a spokeswoman for his household mentioned. Earlier than he was taken to Kuje, Mr. Gambaryan recorded a video of himself within the courtyard of the guesthouse.

“Guys, I’ve executed nothing fallacious,” he mentioned. “I’ve been a cop my complete life. I simply ask the Nigerian authorities to let me go.”

Julian Barnes and Ruth Maclean contributed reporting.