US lawmakers say Nigeria is detaining American to extort Binance

US lawmakers have accused Nigeria of wrongfully detaining an American staff member of cryptocurrency exchange Binance in an attempt to extort money. They urged President Joe Biden and the State Department to quickly intervene in the case.

Tigran Gambaryan, 40, and a company colleague were arrested by Nigerian security authorities in February while on an official visit to the country.

Gambaryan is facing charges of tax evasion, money laundering and engaging in unlicensed financial activities, in a trial that began in May.

“Mr. Gambaryan’s health and well-being are in danger, and we fear for his life,” read a letter dated June 4 and signed by 16 members of the US House Foreign Affairs Committee.

“It is crucial to emphasize that the charges against Mr. Gambaryan are baseless and constitute a coercion tactic by the Nigerian government to extort his employer, Binance,” stated the letter, which also said he had been subjected to harsh treatment and called for swift action to save his life.

Nigeria’s government, responding to the accusations, said it is following due process. “Prosecutors are confident of their case, based on the facts and evidence gathered. Binance will have every opportunity to defend itself in court against these severe charges of financial crimes,” Information Minister Mohammed Idris said on Wednesday.

Gambaryan’s representatives and Binance have demanded his release, stating that he has no decision-making power in the company. They say he should not be held to answer to any alleged company offenses.

Nigerian authorities this year renewed their crackdown on crypto, arguing that trades on platforms like Binance helped weaken the local naira currency even as it evades paying taxes on earnings from its activities. Idris, the information minister, claimed Binance had “a turnover in Nigeria of over $20 billion” in 2023.

The central bank lifted a ban on banks enabling crypto transactions last December but restrictions remain in effect as no institutions have been licensed to carry out crypto transactions in the country. Internet service providers have maintained restrictions imposed in February on user access to the apps and websites of crypto companies, including that of Binance.

The US lawmakers’ claim of extortion mirrors those Binance made in May. Richard Teng, the company’s CEO, said executives were asked by an agent of a Nigerian legislative committee to make “a significant payment in cryptocurrency” to settle allegations of tax violations after a meeting in January this year. Binance declined to make the payment, Teng said.

Gambaryan’s trial will continue in a court in Nigeria’s capital Abuja this month. He has been remanded in the city’s Kuje prison, a maximum security facility that has previously been used to detain alleged extremists affiliated with the militant Islamist group Boko Haram.

Changpeng ‘CZ’ Zhao, Binance’s billionaire founder and former chief executive, began serving a four-month sentence in a prison in California this month and will be due for release in September, according to the US Bureau of Prisons website.

The 47-year-old Canadian pleaded guilty to violating US money laundering laws and was sentenced in April. The company also pleaded guilty to operating an unlicensed money transmitting business and agreed to pay a $4 billion fine by the Justice Department.

US Treasury Secretary Janet Yellen denounced Binance for “willful failures [that] allowed money to flow to terrorists, cybercriminals, and child abusers through its platform.”

• A group of former prosecutors and federal agents in the US also wrote to US Secretary of State Anthony Blinken, urging him to “step up” efforts to secure Gambaryan’s release, Axios reports.