In a significant development in the approach to crypto-currency regulation in Nigeria, U.S. citizen Tigran Gambaryan, Binance’s head of financial crime compliance, was released from Nigerian custody after eight months of detention on allegations of money laundering and currency manipulation. His release comes as the United States and Nigeria form the Bilateral Liaison Group on Illicit Finance and Cryptocurrencies to address increasing challenges posed by cybercrime and illicit finance within the digital asset ecosystem. This joint initiative, launched by the U.S. Department of Justice and Nigerian authorities, seeks to bolster cross-border investigative capacity and strengthen law enforcement collaboration in the fight against cybercrime.
The timing of Gambaryan’s release has stirred fresh debate in Nigeria, given its close alignment with the group’s formation, though neither side has officially linked the two. Held at the Kuje Correctional Center in Abuja since February, Gambaryan’s health deteriorated significantly during his detention due to limited access to necessary medical care. Nigerian authorities cited health concerns as the reason for his release, which followed several denied requests for bail on grounds of his deteriorating health conditions, including a herniated disk, malaria, and pneumonia.
Gambaryan’s departure from Nigeria marks an intense chapter in the country’s evolving relationship with cryptocurrency exchanges, particularly Binance. In March, his colleague, Nadeem Anjarwalla, evaded similar charges by fleeing to Kenya. Both Binance officials had been held following a visit to Nigeria that triggered accusations of financial misconduct. Binance has repeatedly defended its executives, stating that Gambaryan was not acting in an operational capacity for the company during his visit and alleging Nigerian officials suggested a covert payment to resolve the matter, a claim denied by Nigerian authorities.
In a statement upon Gambaryan’s release, Binance commented: “Today, American citizen Tigran Gambaryan left Nigeria to return home to his family after eight months of detention. He has suffered significant health setbacks while in prison and will now be able to receive the medical care he urgently needs.”
Growing Regulatory Friction
The U.S.-Nigeria Bilateral Liaison Group on Illicit Finance and Cryptocurrencies comes at a crucial moment in Nigeria’s regulatory landscape. Increased scrutiny of Binance had led the company to suspend its Nigerian naira (NGN) trading services earlier this year. Following rising concerns about “suspicious flows” linked to cryptocurrency exchanges, Binance announced in early March that it would no longer support naira-denominated services, halting withdrawals in NGN and discontinuing its NGN trading pairs. This step underscored the regulatory headwinds that Nigeria’s crypto market faces, as the Central Bank of Nigeria and other regulatory bodies target the crypto sector amid concerns over illicit transactions.
For Nigerian users, Binance’s decision was felt swiftly. NGN deposits were halted, and all naira-related trading pairs were removed from the platform by March 7. The company’s pivot was also reflected in its peer-to-peer services, where Binance stopped supporting naira transactions as it recalibrated its operations in response to Nigerian regulatory pressures.
A Shifting Crypto Landscape
Nigeria, previously celebrated as one of the world’s top adopters of cryptocurrency, has witnessed an intense regulatory shift in recent years. The Central Bank of Nigeria, in a landmark 2021 policy, prohibited financial institutions from offering services to cryptocurrency exchanges, effectively isolating crypto from the traditional banking sector. This was followed by actions from Nigeria’s Securities and Exchange Commission, which mandated that crypto traders register with the commission, signaling tighter scrutiny on the nascent sector.
Adding to this, the Nigerian House of Representatives’ Committee on Financial Crimes issued an ultimatum to Binance’s then-CEO Richard Teng in early March, demanding he appear before the committee amid allegations of facilitating illegal financial flows. Though Teng did not appear, the summons marked a clear signal of Nigeria’s intensified regulatory stance.
Crypto firms now face an uncertain path in Nigeria, where, despite a high rate of digital asset adoption, increasing government regulation threatens market participation. According to a recent Chainalysis report, Nigeria ranks second globally in cryptocurrency adoption. Still, calls from within the Nigerian government, including from advisers to the president, advocate for a nationwide ban on major crypto exchanges like Binance and KuCoin.
A Strained Future for Crypto in Nigeria?
The formation of the U.S.-Nigeria Bilateral Liaison Group marks a cautious step toward addressing the shared challenges of managing cryptocurrency-related risks. For Nigeria, the group’s activities could foster a more structured regulatory environment while possibly reducing friction with international players in the digital finance sector. For Binance and other global exchanges, however, the regulatory unpredictability in Nigeria remains a pressing challenge. As Nigeria moves to expand its control over the crypto market, exchanges and investors alike face an uncertain future in one of the world’s most promising markets for digital finance.
The group’s creation could serve as a framework for balancing regulation with innovation in digital finance across Africa, but its effectiveness remains to be seen. In the meantime, Binance’s response and the broader crypto industry will likely continue to navigate Nigeria’s volatile regulatory terrain.