From the description of the VIP treatment given the two Binance executives abducted by the Nigerian government in a Mohammed bin Salman’s Ritz-Carlton style, one gets the impression that they did not think their tactic through. They detained the men (Nadeem Anjarwalla and Tigran Gambaryan) deemed economic sabotages, still allowed them several privileges, somehow forgot to put them on a watch list, and one of them managed to escape. Nigeria’s handling of the Binance affair suggests that their detention and proposed trial were half-hearted. So desperate was the government to find a scapegoat that they invited Binance officials, detained them, and demanded $10bn from their employers.
The government alleges that some unscrupulous elements use Binance for money laundering, terrorist financing, currency speculation and market manipulation, thus distorting the Nigerian economy and weakening the Naira against other currencies. Nigeria also accused them of offering taxable services without remitting taxes to the country. The government said over $21.6bn was traded by Nigerians whose identities were concealed by Binance. These accusations are grievous, and I agree that they should be addressed. However, it was foolish to arrest, detain the Binance officials, and demand money. Even the bandits that abduct schoolchildren for a living are far more tactical. By doing that, Nigeria overplayed its hand.
People like to come up with how the United States similarly extracted $4.3bn from Binance to justify the detention of Anjarwalla and Gambaryan, but seem to forget that the US—despite the leverage it has over Binance since the country is their major market— did not resort to abducting company officials and demanding payment. They spent years piling up evidence and going to court. Their prosecutors demonstrated that Binance violated federal anti-money laundering and sanctions laws through lapses in its internal controls. They failed to report more than 100,000 suspicious transactions involving designated terrorist groups including Hamas, al Qaeda, and ISIS. Prosecutors also alleged that Binance’s platform supported the sale of child sexual abuse materials and was among the largest recipients of ransomware proceeds.
Nigeria has relatively little leverage over transnational corporations like the US does, and we would have done far better by addressing the situation through the instrument of the law, diplomacy, policies, technical expertise, and moral suasions. If Binance has not been remitting taxes to Nigeria, we should create a policy framework and technical structure that facilitates it. The fact that they sent two of their workers to Nigeria suggests good faith on their part. We should have worked hand in hand with the company to resolve the issues raised.
But trust Nigerian officials. They like gragra. Thinking through situations can be too tasking for them, so they quickly resort to the sole weapon of their warfare: force. Everything must be remedied through a blatant show of force. What exactly did they think they would achieve by abducting two Binance officials and demanding $10bn?
Think about it: if you were the CEO of Binance and asked to give up information regarding transactions worth $21.6bn in exchange for two company officials, would you? You would consider that paying the ransom might not secure your company officials. Besides, if you allowed yourself to be blackmailed, what would stop other broke countries and individuals from seizing your officials and demanding payment you respond? So, how should you respond?
Well, you will first disconnect the men’s access to any of the company’s operating systems so that they will have no means of giving up valuable information, even under duress. You will make the necessary diplomatic and legal moves to get your officials released, but you will also steady yourself to wait out Nigeria. What you will not do is hand over money or information to the abductor. Even if those men die in Nigerian custody, it would still be far cheaper to pay their families some compensation than to yield grounds. Even if you pay their families N100m each, it is still not up to one per cent of the sum at stake.
I listened to a television interview where a talking head said Nigeria should extradite Anjarwalla. Why keep escalating errors? It was bad enough that Nigeria started what it had no idea how to finish, it is imprudent to keep expending resources over inanity. Did anyone study the company organogram to determine that these “executives” are central to decision-making in Binance to the point that taking them hostage ever made sense? Even now, it is more than likely that their job with Binance has been terminated. If an abducted employee manages to return in a dramatic escape, you would rightly wonder if it were not a ploy by the abductors to get access to the company by other means. In case the abducted had been brainwashed, you would either place him on an administrative leave or pay him a severance pay. Of what use would further pursuing Anjarwalla be to Nigeria?
The trouble with the Binance affair is the Nigerian tendency to blame spurious factors for its economic woes. Nigeria vs. Binance is a recrudescence of that time when CBN governor Godwin Emefiele blamed abokifx—a website that reports exchange rate figures—for tanking the national currency. I thought that had to be one of the most thoughtless moves ever in the history of national banking until the present administration repeated it with Binance. At some point, they started arresting BDC owners for driving up forex through their speculative activities. There was also a time when the Emefiele clown also blamed the Nigerians who collected Business Travel Allowance and ended up not travelling abroad for driving up the exchange rate. Everything, except the real issues of our mono-economy as administered by our perennially visionless leaders, is to be blamed.
It does not seem these people think through the implication of blaming national woes on singular entities. Not only do you display imprudence by thusly broadcasting your vulnerability, but you also give yourself away as inept and lacking the capability to think through situations other countries face but choose to approach with reasonable solutions.
The Binance charade is another misstep by Nigerian leaders dealing with transnational corporations in the age of the internet. We are so wired into demonstrating forcefulness on issues that require rational judgment that we seem to forget that our local gragra ways go nowhere on the international market. Unlike our local cases where a tomato review gets a poor woman arrested, global capitalism is complex and cannot brook the puerility of the Nigerian extrajudicial methods. We did the same unsophisticated thing with the then Twitter (now X). We even inaugurated a committee of old men to go to Silicon Valley to negotiate with Twitter, but what came out of it? Twitter comfortably neglected Nigeria and their share price did not even drop. They proved that the Nigerian market is negligible in the global scheme of things. Binance too had no problem barring Nigerians from its app and that in itself is quite telling. If we were a profitable market, they would not have walked away from us so easily.
I hope the incident teaches our aged leaders who like to make a show of how much they support youths, digital economy, and global technology that the world is no longer what they know it to be. The internet has changed the world in such drastic ways that countries like Nigeria where lawmakers debate social media regulations waste their time. To succeed in the new world being unfolded, you must drop gragra tactics and commit to learning so you can propose reasonable solutions.
As for Gambaryan, they should let him go his way. That these men were labelled “executives” and sent to Africa does not mean they have any real power in the corporation. Even if you abduct their CEO for $10bn, you will be surprised how the company board of shareholders will rather give him up than give up money. Binance trades capital, not sentiments.
Credit: Abimbola Adelakun