The Federal Government has accused Binance of blackmail after the company alleged officials demanded $150 million in cryptocurrency payments as bribe to settle the prosecution of its executives in Nigeria. 

On Tuesday, Richard Teng, Binance’s chief executive officer (CEO), said some unknown persons in Nigeria demanded huge payments in digital currency to make their problems in the country “go away”.

More to follow…

Peter Obi, presidential candidate of the Labour Party (LP) in the 2023 elections, says the federal government is more interested in milking a dying economy through the introduction of the cybersecurity levy.

In a post on his X account on Wednesday, Obi said the policies implemented by the government not only drive the citizens into poverty but also diminish the country’s competitiveness in the economic environment.

According to Obi, it is unreasonable to expect the struggling citizens of Nigeria to individually finance all government activities.

“The introduction of yet another tax, in the form of Cybersecurity Levy, on Nigerians who are already suffering severe economic distress is further proof that the government is more interested in milking a dying economy instead of nurturing it to recovery and growth,” Obi said.

“The imposition of a Cybersecurity Levy on bank transactions is particularly sad given that the tax is on the trading capital of businesses and not on their profit hence will further erode whatever is left of their remaining capital, after the impact of the Naira devaluation and high inflation rate.

“It is inconceivable to expect the suffering citizens of Nigeria to separately fund all activities of the government. Policies such as this not only impoverish the citizens but make the country’s economic environment less competitive.

“At a time when the government should be reducing taxes to curb inflation, the government is instead introducing new taxes. And when did the office of the NSA become a revenue collecting centre?

“And why should that purely national security office receive returns on a specific tax as stated in the new cybersecurity law?

On May 6, the Central Bank of Nigeria (CBN) directed banks and other financial institutions to implement a 0.5 percent cybersecurity levy on electronic transfers.

CBN said the policy would take effect in two weeks and charges would be described as ‘Cybersecurity Levy’.

The apex bank said the charges would be remitted to the national cyber security fund, which would be administered by the office of the national security adviser (ONSA).

The house of representatives has denied demanding bribe from Binance, a popular cryptocurrency platform.

On Tuesday, the cryptocurrency giant said some unknown persons in Nigeria demanded huge payments in digital currency to make their “problems in the country go away”.

On February 28, the federal government detained two top executives of Binance as part of a probe bordering on illegal operations in the country and foreign exchange rate manipulations.

The detained executives included Nadeem Anjarwalla, a 37-year-old British-Kenyan and Binance’s regional manager for Africa; and Tigran Gambaryan, a 39-year-old US citizen and Binance’s head of financial crime compliance.

Nigeria’s government, on March 25, filed a criminal charge against Binance for “tax evasion” — the same period Anjarwalla fled detention.

THE BLOG POST

Speaking on the issues, Richard Teng, Binance’s chief executive officer (CEO), in a blog post, said despite multiple requests, Binance has still not received details of the allegations, “and our employees, therefore, inquired if there was an opportunity to submit our responses in writing and in the absence of a public hearing”.

Teng said Binance held a meeting with the house committee on financial crimes (HCFC).

“There were a number of reasons for that, including the sensitivity of the information and getting the opportunity to see the allegations in full and prepare a thorough substantive response,” he said.

“On January 8, Binance employees had a face-to-face meeting with three members of the HCFC and a clerk in Abuja at the House of Representatives building for a scheduled pre-hearing engagement in private.

“The meeting was chaired by the Honourable Peter Akpanke, the Honourable Philip Agbese, and the Honourable Peter Aniekwe, as well as a clerk.

“During the conversation, the Committee highlighted the important nature of the issues at hand and the lengths to which they were prepared to go to summon Binance, including issuing arrest warrants against our team and CEO and preventing our team from leaving the country.

“While concerning, it was understood that the HCFC does not in fact have the power to issue arrest warrants.

“The meeting ended with the Chair confirming they would consider the matter and revert through Binance’s local counsel.

“However, as our employees were leaving the venue, they were approached by unknown persons who suggested to them to make a payment in settlement of the allegations.

“Later that day, our local counsel — representing us at that time — was summoned by the Committee through someone purporting to be their agent, who relayed the Committee’s terms and instructed our local counsel to advise us.”

‘NOTHING LIKE THAT EVER HAPPENED’

During plenary session on Wednesday, Kama Nkemkanma from Ebonyi state, raised a “point of privilege”, saying the house never met with Binance and no bribe has ever been demanded.

“This house can never allow itself to be talked down,” he said.

The lawmaker said the allegation is capable of “bringing the house into disrepute” and should “never be taken lightly”.

Ruling on the point of privilege, Tajudeen Abbas, speaker of the house, said the clerk should “take note”.

“We need to use whatever media available to us to refute this allegation,” Abbas said.

“Nothing like that has ever happened. No committee of the house has ever engaged this man.”