Alleged Money Laundering: EFCC amends $35,400,000 charges against Binance and fleeing Nadeem Anjarwalla

The Economic and Financial Crimes Commission (EFCC) has amended its $35,400,000 alleged money laundering case against Binance Holdings Limited and one of its fleeing executives, Nadeem Anjarwalla, before the Federal High Court in Abuja.

The amended charges were read before Justice Emeka Nwite on Monday, just weeks after the court discharged American citizen Tigran Gambaryan from the case due to health and diplomatic grounds cited by the EFCC.

In the amended six-count charge, Binance and Anjarwalla were accused of concealing the origin of a cumulative sum of $35,400,000 (Thirty-Five Million, Four Hundred Thousand United States Dollars) generated as revenue by Binance in Nigeria, knowing that the funds allegedly constituted proceeds of unlawful activity, punishable under Section 18(3) of the Money Laundering (Prevention and Prohibition) Act, 2022.

What Transpired in Court

The duo was also accused of engaging in the business of a financial institution (other than insurance, stock broking, and pension fund management) without a valid license, contrary to and punishable under Section 58(5) of the Banks and Other Financial Institutions Act, 2020.

• Similar to the initial charge, the EFCC also alleged that despite not being an authorized dealer in Nigeria’s Autonomous Foreign Exchange Market, Binance and Anjarwalla used their virtual asset services platform to unlawfully negotiate foreign exchange rates in Nigeria, contrary to and punishable under Section 29(1)(c) of the Foreign Exchange (Monitoring and Miscellaneous Provisions) Act.
• At the resumed sitting on Monday, EFCC counsel, Ekele Iheanacho SAN, said the parties had agreed at the last adjournment that the Commission would amend its charge, especially after the discharge of Gambayan.
• In compliance with the court’s directive from the previous sitting, he applied for the amended charge to be read to the defendants for their plea to be taken.
• However, as there was no representative for the defendants, Iheanacho stated that, in line with Section 478 of the Administration of Criminal Justice Act, a plea of not guilty should be entered on their behalf.

This was not orally opposed by Binance’s legal team.

The court’s registrar read out the six-count charge in open court, and the judge entered a not guilty plea on behalf of the defendants in accordance with Section 478 of the Administration of Criminal Justice Act.

This section states that if a corporation does not appear by a representative and fails to enter a plea, the court shall order a plea of not guilty, and the trial shall proceed as though the corporation had duly entered a plea of not guilty.

Subsequently, the judge adjourned the case to November 25, 2024, and February 24-25, 2025, for the continuation of the trial and cross-examination.

Backstory

Last year, Nigeria’s National Security Adviser (NSA) classified cryptocurrency trading as a national security issue.

• Following this, the Central Bank of Nigeria (CBN) directed four fintech startups operating in the country—Opay, Moniepoint, Paga, and Palmpay—to block the accounts of customers engaging in cryptocurrency transactions and report those transactions to law enforcement agencies.
• Earlier in February this year, the crypto trading platform Binance had to disable its peer-to-peer feature for Nigerian users as it came under scrutiny by the Nigerian government over allegations of currency manipulation and money laundering.
• Meanwhile, the Securities and Exchange Commission (SEC), during a virtual meeting with the Blockchain Industry Coordinating Committee of Nigeria (BICCoN), called for new cryptocurrency measures aimed at removing the Naira as a currency pair from cryptocurrency peer-to-peer platforms.
• The Acting Director-General of the SEC, Dr. Emomotimi Agama, emphasized the need to clean up the virtual assets space from illegal trading activities and safeguard the integrity of the Nigerian capital market.

Agama noted that the recent surge in peer-to-peer (P2P) crypto trading had reportedly impacted the Naira’s exchange rate, prompting the SEC to consider delisting the Naira from P2P platforms to curb market manipulation.

On February 28, 2024, Nigerian authorities detained two senior Binance executives, Nadeem Anjarwalla, a 37-year-old British-Kenyan who serves as the regional manager for Africa, and Tigran Gambaryan, a 39-year-old American who is the head of financial crime compliance at Binance.

Anjarwalla later fled the country from detention.

Binance is facing two separate suits from the FIRS and EFCC: the former regarding tax evasion and the latter concerning money laundering and foreign exchange violations.

Nairametrics recalls that the executives have also filed a fundamental rights case against Nigerian government agencies, citing violations of their constitutional right to liberty.

Nairametrics also reports that the court eventually discharged Gambaryan on health grounds and diplomatic efforts, later corroborated by the EFCC.

• Last Friday, Binance counsel, Babatunde Fagbohunlu SAN, questioned Dr. Olubukola Akinwunmi, Head of the Payment Policy and Regulation Division at the CBN, about his knowledge of the eNaira before the court.
• Akinwunmi had, in previous proceedings, criticized the Binance cryptocurrency platform for offering deposit and withdrawal services meant for banks and other authorized financial institutions without proper authorization.
• He had told Justice Emeka Nwite, during his evidence-in-chief led by Ekele Iheanacho SAN, counsel for the Economic and Financial Crimes Commission (EFCC), that the deposits and withdrawal transactions conducted on the Binance platform were services that Nigerian banks, authorized by the apex bank, were permitted to offer.
• When asked if the eNaira is a legal tender, the witness replied that the legal tender of Nigeria is the Naira, and its digital form is the eNaira, implying the eNaira is a legal tender in Nigeria.

The charge has to be amended since Tigran is no longer in the case.