In a recent statement, Richard Teng, the CEO of the global cryptocurrency exchange Binance, has spoken out about the ongoing conflict between the platform and the Nigerian government. This dispute has led to the arrest of Tigran Gambaryan, a top manager at Binance, who Teng is now urging law enforcement to release immediately.

The Origin of the Conflict

The issues began in May 2022 when Nigeria’s Securities and Exchange Commission (SEC) categorized crypto assets under its regulatory scope. This new rule mandated that all exchanges operating in the country obtain a license and adhere to specific requirements. However, Teng pointed out that the regulatory framework lacked a clear registration mechanism, making it nearly impossible for exchanges to apply for a license successfully. Despite multiple requests for clarification and a streamlined licensing process from Binance, the exchange received no responses from the regulator.

Escalation in June 2023

On June 9, 2023, the situation escalated when the Nigerian SEC issued a circular warning the public against trading on the Binance platform. The circular stated that Binance Nigeria Limited was neither registered nor regulated by the Commission, and therefore, its operations in Nigeria were deemed illegal. It ordered Binance Nigeria Limited to immediately cease engaging Nigerian investors.

Teng highlighted that the government mistakenly believed that the locally registered Binance Nigeria Limited was part of the global Binance exchange. In reality, it was registered by third parties who unlawfully used the platform's name.

Despite the apparent confusion, Teng is certain that the circular was intended for Binance, prompting the company to immediately halt new user registrations and all operations related to marketing, communication with clients, and event organization in Nigeria.

The exchange continued to cooperate with Nigeria’s Financial Intelligence Unit (NFIU) and the Economic and Financial Crimes Commission (EFCC) to enhance the global fight against cryptocurrency-related crimes. This cooperation was deemed crucial for establishing better relations with law enforcement.

However, in December 2023, Binance received a summons to a public hearing from the House Committee on Financial Crimes (HCFC). Before the hearing, Tigran Gambaryan, along with his team, engaged in several meetings with representatives from the NFIU and the mentioned Committee. During one of these meetings, unknown individuals approached the Binance staff offering a large payment to settle the situation, which Teng described as a “compensation for unvoiced accusations.”

Despite the tense atmosphere and the implicit threat of arrest, the Binance team declined the secretive payment and chose to address the matter through official channels, adhering strictly to the law.

Currency Devaluation and Accusations

Parallel to these incidents, Nigeria’s currency, the Naira (NGN), experienced a significant drop in value. Local traders used Binance’s P2P operations to shield themselves from currency depreciation. Although Teng acknowledged that the local currency market started to use exchange rates from Binance for money exchange operations, he emphasized that Binance played no role in setting those prices.

Nevertheless, some government officials accused the exchange of manipulating the market, causing the Naira’s collapse, and contributing to financial instability.

The Current Situation

As the conflict continues, one of Binance’s top managers managed to evade Nigerian authorities, but could not escape from the neighboring Kenya where he was arrested. Discussions between the governments of the two countries regarding his extradition are ongoing, focusing on allegations of tax evasion and money laundering, involving sums totaling $35.4 million.

With another court hearing scheduled for May 17, 2024, the situation remains tense. Binance is calling for the immediate release of its top managers and seeks to resolve the dispute amicably. The company reassures that it remains committed to protecting innocent users and combating malicious activities on its platform.

Richard Teng’s message is clear: he urges Nigerian authorities to allow Tigran Gambaryan to return to his family, and promises that Binance will continue to cooperate with law enforcement agencies as it has done over 600 times in the past. The exchange’s leadership believes that its employees should not be used as leverage in governmental disputes.