US lawmakers accuse Nigeria of taking Binance executive hostage

U.S. lawmakers accused Nigeria of taking a Binance Holdings Ltd. executive “hostage” and urged President Joe Biden to help secure his release.

Sixteen Republican congressmen including Chairman of the House Foreign Affairs Committee Michael McCaul wrote to Biden to have the case of Tigran Gambaryan referred to the Office of the Special Presidential Envoy for Hostage Affairs. 

A U.S. citizen, Gambaryan is head of financial crime compliance at Binance and has been held at a prison in the Nigerian capital, Abuja, since April.

“The charges against Mr. Gambaryan are baseless and constitute a coercion tactic by the Nigerian government to extort his employer, Binance,” the lawmakers wrote in the June 4 letter, a copy of which has been seen by Bloomberg. “Following these charges, Mr. Gambaryan qualifies as a ‘U.S. Citizen wrongfully detained by a foreign government,'” they said.

The faceoff between Africa’s most-populous nation and the world’s largest cryptocurrency exchange burst into view in February, when Nigerian authorities detained Gambaryan and a colleague — who subsequently escaped — during a visit to discuss the company’s compliance issues with the country.

Taken ‘hostage’

“After two rounds of meetings, which were described as starting professional and then becoming increasingly hostile, the government of Nigeria took Mr. Gambaryan hostage,” the lawmakers wrote.

Nigerian Information Minister Mohammed Idris rejected the allegation that the Binance executive had been wrongfully detained.

“Nobody is being kept outside our laws and nobody’s life is in danger,” he said in a telephone interview. “They have committed a crime.”

A U.S. State Department spokesperson said the Department reviews the circumstances surrounding the detentions of all U.S. nationals overseas for indicators that they are wrongful.

“When making these assessments, the Department looks at the totality of the circumstances for each case individually,” the spokesperson said. “We will continue to monitor Tigran Gambaryan’s case closely.”

Gambaryan was initially held at a guest house before formal charges were brought against him and Binance in an Abuja court in April. He is accused alongside the company of charges including nonpayment of value-added tax and corporate income tax, and complicity in aiding customers to evade taxes through its platform. 

The former Internal Revenue Service officer is being held in the Kuje correctional center, a high-security prison in Abuja. The lawmakers said his wellbeing was of grave concern. He last appeared in court on May 23, but the hearing was adjourned until June 20 after his lawyer informed the judge he was too ill to proceed.

‘Fear for his life’

“Mr. Gambaryan’s health and wellbeing are in danger, and we fear for his life. Immediate action is essential to ensure his safety and preserve his life,” the lawmakers said. The letter was also addressed to U.S. Secretary of State Antony Blinken and Roger Carstens, special presidential envoy for hostage affairs.

Nigeria’s information minister rejected this claim.

“We’re a responsible country and we have to ensure that everybody that is being investigated or is being tried under our laws is healthy enough to answer our questions,” Idris said.

Binance’s problems in the West African nation had already been simmering for months prior to the detention, after authorities blocked access to cryptocurrency channels amid a clampdown on speculation against the naira.

Officials say the platforms, which are very popular with Nigerians, have contributed to the local unit’s 68% fall against the dollar since foreign-exchange rules were eased last year.

Nigerian central bank Governor Olayemi Cardoso named the company during a Feb. 27 press conference after announcing a jumbo interest rate hike to defend the naira. Decrying “illicit flows,” he said that $26 billion has passed through Binance in Nigeria “from sources and users who we cannot adequately identify.”

The Nigerian case is the firm’s latest legal problem. Its founder Changpeng Zhao was ordered on April 30 to spend four months in prison in the U.S. for failures that allowed cybercriminals and terrorist groups to freely trade on its platform. Binance in November agreed to pay $4.3 billion to resolve the U.S. allegations.