Tax evasion: Court drops charges against Binance executives, Tigran Gambaryan and Nadeem Anjarwalla

The Federal High Court in Abuja, Nigeria has dropped charges against two executives of crypto exchange company, Binance, Tigran Gambaryan and Nadeem Anjarwalla from the FIRS tax evasion case against the company. This follows the appointment of a Nigerian representative by Binance.

According to a report by Nairametrics, the court made the ruling following an amended charges application filed by the Federal Inland Revenue Service (FIRS) in response to a notice from Binance that it has appointed a Nigerian representative in the case, Ayodele Omotilewa.

At the resumed proceedings today, counsel for Binance, Tonye Krukrubo (SAN) told presiding Justice Emeka Nwite that Binance has forwarded the name of its official representative in the case to the FIRS and the court.  Counsel for the FIRS, Moses Idehu, confirmed the notice and asked the court’s permission to substitute all the previous charges with the fresh amended one.

In FIRS’ fresh application, Binance is now listed as the sole defendant in the case, implying Gambaryan and Nadeem are no longer associated with its case. 

In the amended charge, Binance was accused of enabling the buying and selling of cryptocurrencies and the remittance and transfer of those assets to Nigerians while failing to deduct the necessary Value Added Taxes (VAT) from the transactions. 

“Binance did aid and abet those subscribers on your trading platform to unlawfully refuse to pay taxes, or neglect to pay those taxes and in so doing committed an offence contrary to and punishable under the provisions of S.94 of the Companies Income Tax Act (as amended)”, the document reads.

Read also: Binance expresses disappointment as Nigerian court denies executive bail in money laundering trial

Reprieve for Binance’s Tigran Gambaryan and family

The judgement will offer some reprieve to the family of Tigran Gambaryan, who had consistently argued that the US-native executive cannot be held accountable for the actions of the global exchange.

Recall that during the court session last month, Tigran Gambaryan’s lawyer, Mark Mordi SAN contended that his client cannot take his plea because he refused to accept service on behalf of Binance as he is not authorised to do so.

According to him, the Administration of Criminal Justice Act mandates the antigraft agency to ensure that the company (Binance) was served directly. According to him, the company would appoint a representative in writing following that action. Then, notices and processes can be served on Binance or the recognised representative.

“The first defendant (Binance) has no physical footprint in Nigeria and does not have an agent in the country. I urge my lord to discountenance the submission of the EFCC and adjourn so that they can effect service on Binance”, he said.

Tigran Gambaryan, a U.S. citizen and Binance’s head of financial crime compliance was detained alongside Nadeem Anjarwalla, a British-Kenyan who is a regional manager for Africa were charged to court by Nigeria’s tax agency, the Federal Inland Revenue Service (FIRS) on the charges of tax evasion. A few weeks after, Nadeem Anjarwalla reportedly escaped from custody.

A statement from a spokesperson for Tigran’s family also indicates that the wife of the detained American, Mrs Yuki Gambaryan pleaded with the Nigerian government authority to release her husband on the condition that “Tigran is merely an employee“.

“He does not have authority over Binance’s corporate decisions or policies that might have impacted Nigeria. He spends his workday investigating and pursuing criminal activity on the platform. His very job is to help governments, like yours, prosecute and prevent illicit activity“, she said.

Binance vs Nigeria: So much ado about crypto regulation

While Binance CEO, Richard Teng initially claimed that it was working closely with the Nigerian government to resolve the situation, he would later announce that the Nigerian authorities were demanding a hefty bribe from its detained executives to make the money laundering trial initiated against them go away.

In a poignant blog post, Teng projects a strong criticism of the government’s actions, suggesting that detaining Tigran is an unreasonable tactic to pressure Binance. He finds it suspicious that someone seemingly unimportant would be placed in a dangerous prison, implying the true motive might be exerting control over Binance rather than legitimate legal concerns.

Read also: FG denies asking Binance for $150 million bribe to drop all criminal charges

In response, the Federal government vehemently debunked the claim and claimed that it would ensure that the law takes its full course.

Yet, the CEO believes that the Nigerian government has extraordinary power to determine the future of Binance and the broader crypto industry within its borders. He insists that inviting a company’s mid-level employees for collaborative policy meetings, only to detain them, has set a dangerous new precedent for all companies worldwide.

He claims that the company understands the importance of cooperation with regulators and law enforcement. And, he said that the company is ready to collaborate with Nigerian authorities “voluntarily”.

“At the end of the day, Binance wants to have a future where we work alongside the Nigerian government to be part of building a strong economy for the Nigerian people. But this crisis must come to a resolution quickly, and Tigran must be allowed to go home if we’re going to move forward”, he said.