TOPLINE
A Binance executive detained in Nigeria last month escaped from custody over the weekend, as the West African country filed charges of tax evasion against the cryptocurrency exchange and some of its executives in the latest public scandal for the firm.
KEY FACTS
Binance executives Tigran Gambaryan, a U.S. citizen, and Nadeem Anjarwalla, British-Kenyan citizen, were both taken into custody in Nigeria in February but not charged with any crimes until Monday.
The executives and the crypto company were charged with alleged non-payment of value-added tax (VAT) and company income tax, failure to file tax returns, and complicity in assisting customers to evade taxes through its platform, Nigeria’s Federal Inland Revenue Service announced Monday, according to multiple outlets.
The charges come days after Anjarwalla reportedly escaped from where he was being detained after guards watching him took him to a nearby mosque for prayers, The Premium Times, a Nigerian news outlet, reported.
Nigeria is in talks with Interpol to get an international arrest warrant for Anjarwalla, Nigeria’s national security adviser told Reuters.
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Binance confirmed Anjarwalla was no longer in Nigerian custody.
CRUCIAL QUOTE
“Our primary focus remains on the safety of our employees and we are working collaboratively with Nigerian authorities to quickly resolve this issue,” Binance told Forbes in an email.
KEY BACKGROUND
Gambaryan and Anjarwalla have been in Nigeria since Feb. 26 when they reportedly arrived to discuss the country’s decision to ban some cryptocurrency trading websites, including Binance, Coinbase and Kraken. The office of the National Security Adviser in Nigeria detained the pair and seized their passports, according to the Financial Times. Both of their families have since pleaded with authorities to release the executives. Ahead of their detention, Olayemi Cardoso, Nigeria’s central bank governor, told reporters in February officials were concerned about “illicit flows” going through a number of crypto platforms, according to the Financial Times. He went on to say that in one year, $26 billion passed through Binance Nigeria “from sources and users who we cannot adequately identify.” Days later, the Binance executives were detained. The concerns about crypto trading come as Nigeria struggled with currency devaluation. In the past year, the value of the Nigerian currency, the naira, has fallen 70% against the U.S. dollar.
TANGENT
The tax evasion charges and detentions follow high-profile problems Binance has faced in recent years. In November, Changpeng Zhao, the company’s founder, pleaded guilty to Justice Department charges of breaking anti-money laundering laws and violating sanctions and agreed to pay more than $4.3 million in fines and restitutions for doing so. In June, the Securities and Exchange Commision sued Binance for operating an illegal exchange in the U.S. Months before that, in March, regulators alleged that Binance and Zhao evaded Commodity Futures Trading Commission rules. The crypto company reportedly remains under investigation from the SEC over whether the company illegally sold digital coins when it started out in 2017. Binance isn’t alone: other crypto firms, including Beaxy and Kraken, have also been hit with civil lawsuits recently as regulators crack down on the industry.
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