The Breakdown - The State Department's Unconscionable Abandonment of an American Citizen

Episode Date: August 29, 2024

NLW catches up on the latest on Binance exec Tigran Gambaryan's wrongful detention in Nigeria, where he's effectively being held hostage in an attempt to extract ransom from Binance. Enjoying this content? SUBSCRIBE to the Podcast: https://pod.link/1438693620 Watch on YouTube: https://www.youtube.com/nathanielwhittemorecrypto Subscribe to the newsletter: https://breakdown.beehiiv.com/ Join the discussion: https://discord.gg/VrKRrfKCz8 Follow on Twitter: NLW: https://twitter.com/nlw Breakdown: https://twitter.com/BreakdownNLW

Welcome back to The Breakdown with me, NLW. It's a daily podcast on macro, Bitcoin, and the big picture power shifts remaking our world. What's going on, guys? It is Wednesday, August 28th, and today we are talking about an update in the case of Binance executive Tigran Gambarian, who has been detained in Nigeria for six months. Before we get into that, however, if you're enjoying the breakdown, please go subscribe to it, give it a rating, give it a review, or if you want to dive deeper into the conversation. come join us on the Breakers Discord. You can find a link in the show notes or go to bit.L.Y slash breakdown pod. Well, friends, attention is building around the case of Binance Compliance Officer Tigran Gambarian, who has been locked up in Nigeria for, like I said, six months at this point. Gambarian is facing money laundering charges not because of his personal actions,

but rather due to the general conduct of his employer in the African nation. His trial is set to commence next week after his lawyer's petition for an expedited hearing. If you haven't been following this story, here's a quick recap to get you up to speed. Since mid-20203, the Nigerian Naira suffered a series of steep devaluations, losing over 70% of its value against the U.S. dollar. The most recent devaluation occurred in January, with the government pinning the blame squarely on Binance facilitating currency manipulators. At the time, Binance hosted a thriving peer-to-peer trading network in Nigeria.

The platform was processing a ton of foreign exchange volume alongside their crypto trading. The allegations went a step further, however, alleging that fake orders were used to crash the value of the currency. Leaving aside the veracity of those allegations, Teagrin Gumbarion was sent to Nigeria in February to hold high-level meetings with the government. Now, keep in mind that prior to becoming a top compliance officer with Binance, Gambarian had a storied career as an IRS investigator. He was pivotal in the investigations into dark web activity in the mid-2010s, and pioneered many of the forensic blockchain analysis techniques that are still in use today. I want to double-click on this point because it will become

important later. Gambarian is not just a U.S. citizen, but also one of the most highly respected and high-impact law enforcement officers of the past decade. Investigations he took part in led to the seizure of $4.7 billion in illicit funds and took down multiple international crime rings. So, back to February. When Gambarian touched out in Nigeria, it quickly became clear that the government was uninterested in negotiations. Within a week, he was whisked away to a government facility, stripped of his phone and passport, and denied access to legal advice. In April, charges were brought with Gambarian personally charged with money laundering and tax evasion as a proxy for Binance. Binance is also facing charges as a corporate entity. He was sent to prison to await trial

in appalling conditions. The outcry was immediate and many called for State Department intervention. Patrick Hillman, the former chief strategy officer for Binance tweeted, The White House should be ashamed for allowing this hostage situation to continue. Tegrin Gambarian is a U.S. citizen and an American hero. He is being held hostage by a rogue regime. In the intervening months, Gambarian's physical and mental condition have deteriorated rapidly. He contracted malaria, pneumonia, and multiple throat infections that will require tonsil surgery. He ultimately suffered a herniated disc that has left him wheelchair bound and likely to cause permanent loss of mobility. He collapsed in court during his most recent hearing in July. His lawyers and family members allege he has been

refused adequate medical treatment and has not been admitted to a hospital. During this time, the matter has been raised multiple times to the administration and they are clearly aware of the situation. Members of Congress wrote to the State Department months ago, urging them to elevate this to a hostage situation and treat it with the seriousness it deserves. And yet, nothing appears to be happening. Earlier this week, Fortune sought comment from the State Department as to why they haven't classified Gambarian as wrongfully detained. This classification triggers additional obligations around hostage negotiation and provision of updates. They received what they called a carefully worded statement from a State Department spokesperson. Quote, the Department reviews the

circumstances surrounding the detentions of all U.S. nationals oversee for indicators that they are wrongful. When making these assessments, the department looks at the totality of the circumstances for each case individually. We will continue to monitor Tigran Gambarian's case closely. Hello, friends. Before we get back to the rest of the show, I want to implore you to join me at Permissionless. Permissionless is the conference for Crypto-Natives by Crypto-Natives, and the reason it's so important this year is that despite regulators' best attempts to push industry, founders, devs, and executives out of the U.S., the United States remains the beating heart of crypto. Today, the tide is turning. Policymakers have pivoted from fighting crypto to

embracing it. Literally now, we are in a major political party's platform, which will lead ultimately to the creation of new financial products, new applications, and ultimately new adoption. Permissionless is the conference for those using and building on-chain products. It's home to the power users, the devs, and the builders. And perhaps more importantly, I will be there. The location is Salt Lake City, the dates are October 9th to the 11th, and tickets are just $499. If you want to get 10% off, use code Breakdown 10. Go to the Blockworks website, blockworks.co.

There will be links to register for the conference, and again, you can use Code Breakdown 10 to get 10% off. As Gambarion's condition deteriorates, the outcry has become deafening. On Monday, his spouse Yuki published a desperately for intervention, saying, it has been six months since I last saw my husband, since our children last held their father's hand. His health is deteriorating to the point where he can no longer walk. Between bouts of malaria, pneumonia, and the unimaginable mental toll of his detention, he is now reaching the point of no return. For six months, my life, my living nightmare has been filled with pleas. Please to the

Nigerian government. Please to the U.S. government. Please to the media. Please to anyone who will listen. I've been pleading for their mercy, for their understanding for their humanity. Please help me bring my husband home. Yesterday, Binance CEO Richard Tang released another blog post on Gambarian's imprisonment. He highlighted that the executive is explicitly being held as a hostage. During Gambarion's bail hearing in April, prosecutor said, Binance is operating virtually. The only thing we have to hold on to is this defendant. Teng noted that Gambarian is being denied access to medical treatment and legal counsel. He commented, there is no need to imprison an innocent employee to answer for any allegations

against Binance. We have settled issues in countries around the world in a reasonable, collaborative, and amicable manner with governments. All these were done without threat or harm inflicted on our employees. Teng closed the post by appealing to the Nigerian government to release Gambarian on humanitarian grounds. In the crypto industry, the outrage is boiling over. Tasa's CSO Jameson Lopp tweeted bluntly, Nigeria is torturing him to death. Nick Carter posted, It really is a gigantic scandal that the U.S. will give up the literal Lord of War to Russia in exchange for a Kami WNBA player, but will do nothing to free an unjustly detained

decorated former federal agent. This of course refers to the case of Brittany Griner. In early 2022, she was detained in Russia for transporting a tiny amount of hash oil. She spent 10 months in jail before pleading guilty in being sentenced to spend nine years in a penal colony, following the sentence the State Department sprang into action and classified Griner as wrongfully detained. Within a month, they had arranged a prisoner exchange for Russian arms dealer Victor Bout, who bears the nickname the Merchant of Death. Although it took almost a year to free Griner, the State Department held a press briefing within 24 hours of her arrest. At this stage, we have no clarity that any action is being taken on Gambarian's behalf,

and he is quickly running out of time. By all accounts, he is already at risk of permanent health damage, and it's clear he's being held as leverage against Binance. While Richard Tang has now softened his approach, earlier statements were much darker. In a blog post published in May, Tang accused the Nigerian government of attempting to extort the company for $150 million in exchange for Gambarian's release. Tang commented on the dismal precedent the situation sets for global business, adding, to invite a company's mid-level employees for collaborative policy meetings, only to detain

them, has set a dangerous new precedent for all companies worldwide. We've been covering this story since Gambarian was first attained in February. At first, many assumed State Department intervention was only a matter of time, given the egregious behavior of the Nigerian government. As the months dragged on, it became clear that Gambarian would be left to rot in prison, and frankly abandoned by his government which he had dutifully served for a decade of his life. With the State Department largely silent on the matter, all we're left with is assumptions. Should we assume now that working for a crypto company is enough to forfeit the protection afforded to U.S. citizens? Gambarian joined Binance in late

2021 and by all accounts dedicated himself to improving compliance during a turning point for the company. Are we to assume that, that the protection of the State Department has become politicized in the administration's desire to punish the industry? It's hard not to feel that this treatment would be unthinkable for a bank executive or basically any other industry. The State Department's incredible non-response to fortune is so unconscionable it's hard to describe. The only rational conclusion is to assume that they think that Gambarian might be rightly detained, which seems ludicrous on the face of it, again, unless you assume that the grudge against the crypto industry is so bad that they're actively enjoying this sort of punishment. And frankly, the America that I grew up in

wouldn't give a shit if there was merit to the holding based on the conditions this person is being held in. This is not the way a superpower handles its citizens, period, full stop. I think in a sea of things that have been reasonable to be angry about when it comes to those of us in the crypto space, this is just about the tops for me. If you find it as a frustrating, as I do, please go write to your congressperson, write to another elected official, post on social media, push them to ask the State Department to classify Gambarian correctly as wrongfully detained. That on its own won't solve the issue, but it would require the State Department to actually engage with the matter in a more meaningful way. Now, this episode is short, but I want you to use

the rest of the time that you would have spent listening to this to yelling at someone somewhere about this. Until next time, be safe and take care of each other. Peace.