In June 2023, The United States Securities and Exchange Commission (SEC) sued the world’s largest cryptocurrency exchange, Binance, and its CEO and founder, Changpeng Zhao, for allegedly failing to restrict U.S. customers from its platform and misleading investors about its market surveillance controls as well as for operating an unregistered securities exchange.
In November 2023, Binance settled with the U.S. Government, agreeing to pay over $4 billion to resolve the Justice Department’s investigation into violations of the Bank Secrecy Act (BSA). The settlement also includes the Treasury Department and the Commodity Futures Trading Commission.
Binance is still not out of the legal woods yet; A US judge has also asked the Binance CEO to hand over his passport to a third party who will then travel with him (in effect, the passport will not be held by the U.S. or the owner)
The key here is legal action, which compels Binance to defend itself in court and be subject to legal remedies and punishments.
In February, Nigeria invited Binance to talks over issues with the exchange rates and allegations of currency manipulation; Binance agreed to speak and sent two senior officials to Nigeria, Tigran Gambaryan, Head of Financial Crimes Compliance and Nadeem Anjarwalla, Regional Manager of Africa; then, Nigeria arrested the officials and has held them to date. I am unaware that the FGN has made a legal case against Binance in a Nigerian or foreign court.
Any agreement those Binance Officials sign to leave Nigeria will be voided once they leave. Why? They signed under duress.
Inviting, arresting, and detaining international business officials without charge is not how things are done. Nigeria and Nigerians have sued corporations like Pfizer in Nigeria and Shell in the U.K. and won a judgment, which the foreign parties accepted. In this instance, Nigeria has deployed subterfuge outside the legal system to hold their officials and demand crucial proprietary information from Binance.
This is not a matter of what Binance has done wrong but of how Nigeria’s decision to pursue this route harms its future legal options and image. Nigeria, Africa’s largest democracy, has resorted to “self-help.”
Will any corporate official be invited to come to Nigeria to settle issues after this? Or do you believe the business community is not taking notes?
This is 2024. Nigeria is the latest economy in Africa and the second largest adaptor of cryptocurrencies after India; it is not some banana republic; stop acting like we do not have laws and courts.
If you believe Binance has broken the law, you can sue in Nigeria, the UAE, or wherever they are domiciled. State your case, force Binance to produce documents in court and seek all legal remedies as you see fit.
