The year 2023 marked only the beginning of Binance’s legal entanglements with authorities across various countries. In recent months, several regulators and governments have raised concerns about the cryptocurrency exchange.
The Nigerian Episode
In late February, the Financial Times reported the detention of two top executives of the company in Nigeria — Nadim Anjarwalla and Tigran Gambaryan.
Binance representatives arrived in the country following a government decision to ban several digital asset trading websites. However, upon arrival, they were detained by the office of the national security advisor, and their passports were confiscated.
The authorities accused the exchange and its leaders of manipulating the naira (NGN) exchange rate. There were claims that Nigeria demanded $10 billion in compensation from Binance. However, the trading platform and the president’s advisor, Bayo Onanuga, later denied these rumors.
Starting March 5, the exchange began gradually suspending operations with NGN, including P2P services, Binance Pay, and Invest.
The local House of Representatives Committee on Financial Crimes summoned Binance CEO Richard Teng for questioning regarding alleged terrorism financing and money laundering. Nigeria also demanded the company provide a list of the top 100 users in the country and the entire transaction history for the past six months.
After the 14-day detention period expired, the arrest of Binance’s top executives was extended until April 4. However, Anjarwalla managed to escape Nigeria using a Kenyan passport.
Prior to the incident, authorities charged the top executives and Binance Holdings Limited with tax evasion on four counts, including failure to register with the local FTS.
The government’s lawsuit was filed in the Federal High Court in Abuja on March 25.
In an interview with The Record, the wife of the detained executive, Yuki Gambaryan, said she regularly spoke and corresponded with her husband, but now cannot contact him directly. According to her, he is in a room in a guest house, from which he is not allowed to leave.
“People working on this issue at Binance send him updates, and he just sits and waits for someone to do something. It’s hard for him because Tigran is a very nervous person,” she added.
Additionally, the Gambaryans have two children — a five-year-old boy and a ten-year-old girl. Yuki noted that “it is becoming increasingly difficult to maintain a positive attitude and keep spirits up.”
Meanwhile, Binance assured that it is working with Nigerian authorities to resolve the issue.
Philippine Branch
Back in 2022, the think tank Infrawatch PH sent a letter to the Philippine Department of Trade and Industry urging an investigation into Binance for illegal marketing campaigns.
At the time, the matter did not progress beyond written complaints, and former Binance CEO Changpeng Zhao planned to apply for licenses in the country. The company head hoped the process could be completed within a few months.
However, in the same year, the Philippine Central Bank suspended the processing of applications and issuance of licenses to virtual asset service providers for three years, forcing the initiative to officially enter the local market to be put on hold.
Binance continued to operate in the country without a license, and in November 2023, authorities accused the company of providing financial services without proper registration.
The Philippine Securities and Exchange Commission (SEC) threatened employees of organizations involved in promoting or trading on the platform with up to 21 years in prison and a fine of 5 million Philippine pesos (~$88,700).
In March 2024, the SEC began taking steps to restrict local traders’ access to Binance services. The agency approved the submission of an official request to the National Telecommunications Commission to block the exchange’s website and other web pages.
The Commission noted that the company offers a wide range of financial instruments without a license: spot trading of digital assets with leverage, options, futures, savings crypto accounts, a staking service, and an ICO platform.
Russian Successor’s Setback
On March 25, the cryptocurrency exchange CommEX unexpectedly announced a gradual suspension of operations. The spot market will close on April 23, and the official website will cease operations on May 10.
In September 2023, Binance exited the Russian market and sold its business to CommEX, signing a corresponding agreement. This was followed by the migration of users to the new platform.
By November, the volume of P2P trading on the new exchange reached 90 million rubles, and the number of registered accounts exceeded 200,000. As of January 25, all users were allowed to post ads on the internal P2P platform.
In late February 2024, CommEX reported difficulties in withdrawing rubles through the fiat channel.
A month later, the company announced the cessation of operations, citing a “thorough analysis of the current situation and a review of strategic plans.” Binance representatives told ForkLog that CommEX failed to fulfill its obligations under the concluded deal.
The platform is currently negotiating with other service providers regarding the sale of its business in Russia.
Meanwhile, Binance has joined the Global Travel Rule Alliance. The platform provides infrastructure to comply with the Financial Action Task Force’s anti-money laundering recommendations.
According to the exchange’s statement, this “strategic step” aims to enhance regulatory compliance and strengthen data security.
In November 2023, the founder of Binance admitted guilt in failing to maintain an effective anti-money laundering program as the company’s head. As part of an agreement with the US Department of Justice, he agreed to pay a $50 million fine and step down as CEO.
Hearings in Zhao’s case are scheduled for April 30. He faces up to 18 months in prison, although earlier discussions suggested a 10-year sentence.