Binance Halts Nigerian Licensing Amid Executive Detention

Binance, one of the world’s largest cryptocurrency exchanges, has paused its efforts to comply with Nigeria’s digital asset regulations. This decision comes as Binance awaits the release of its detained executive, Tigran Gambaryan, who remains in Nigerian custody on money laundering charges.

Key Conditions for Compliance

A Binance spokesperson, in an interview with Nairametrics, laid out two conditions that must be met before the exchange seeks registration under Nigeria’s Securities and Exchange Commission (SEC):

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• Release of Tigran Gambaryan: Binance’s head of financial crime compliance has been detained on money laundering charges, complicating the exchange’s relationship with Nigerian authorities.
• Resolution of Charges: Binance must settle ongoing charges, including tax evasion and violations of foreign exchange rules, brought against it by the Nigerian government.

“We are pleased with the progress Nigeria is making on its digital assets regime. However, we will only consider registration once Tigran is freed and our issues are resolved,” said the Binance spokesperson.

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Seeks Release of Jailed Employee Before Pursuing Nigerian License
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— NHASH (@NHASH_Official) September 19, 2024

Nigeria’s Push for Cryptocurrency Regulation

Nigeria has been ramping up efforts to regulate its rapidly growing cryptocurrency sector:

• Accelerated Regulatory Incubation Programme (ARIP): Introduced in June 2024, ARIP aims to onboard Virtual Asset Service Providers (VASPs), including Binance, under a compliance framework.
• Approval-in-Principle (AIP): This compliance program offers exchanges initial approval before full licensing.
• Requirement for Physical Presence: VASPs must open offices in Nigeria to comply with SEC regulations.

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Despite these efforts, Binance has been slow to act, unlike its competitors. In August, the Nigerian SEC approved two crypto exchanges, Quidax and Busha, under ARIP. However, Binance remains reluctant to proceed.

The Impact of Gambaryan’s Detention

Gambaryan’s arrest in Nigeria, alongside fellow Binance executive Nadeem Anjarwalla, has created a legal impasse. While Anjarwalla managed to flee to Kenya, Gambaryan remains imprisoned:

An American citizen and constituent of mine, Tigran Gambaryan, is being wrongfully detained by the Nigeria government. Worse still, he is regularly being denied access to much needed medical care and his lawyers.

His health is in serious decline with little hope in sight. His… pic.twitter.com/YTMR901OeW

— Congressman Rich McCormick, MBA MD (@RepMcCormick) September 20, 2024

• Health Concerns: Gambaryan has been suffering from multiple health issues, including pneumonia and a herniated disk, worsening during his time in Kuje prison.
• U.S. Intervention: Several U.S. diplomats, including Binance CEO Richard Teng, have appealed to Nigerian authorities for Gambaryan’s release on medical grounds, citing deteriorating U.S.-Nigeria relations.

What’s Next for Binance?

For now, Binance’s future in Nigeria remains uncertain.

• Awaiting Legal Resolution: Binance will not comply with Nigerian licensing requirements until Gambaryan’s release and the resolution of charges.
• Tensions Persist: Gambaryan’s detention continues to create strain, not only on Binance’s operations in Nigeria but also on diplomatic relations with the U.S.

As Nigeria pushes ahead with its crypto regulations, it remains to be seen whether Binance will adapt or further delay its plans for compliance.