The U.S. Response to Binance Exec Tigran Gambaryan’s Detention Is Shameful

As a financial analyst, I’d like to emphasize that the perspectives presented in this article are mine alone. They don’t automatically align with those held by CoinDesk, Inc., or any of its proprietors and shareholders.

Andrew C. Adams holds the position of partner at Steptoe & Johnson LLP’s New York office, and is part of the firm’s specialized blockchain and cryptocurrency team. Previously, he served as the Acting Deputy Assistant Attorney General in the Department of Justice’s National Security Division.

The United States has yet to issue an official statement in response to the recent actions of this country, which raises concerns due to potential violations of fundamental fairness and legal order. Crafting a diplomatic response is a challenging task for U.S. officials, as they must weigh various aspects of the relationship with a nation that seems to disregard these core principles.

See also: Binance Executive Jailed in Nigeria is Suspected of Having Malaria: Family Says

A declaration that an individual has been “unjustly held” or “improperly confined,” for instance, triggers a push under federal laws and rules for imposing economic penalties on identified foreign officials. This possibility comes with potential drawbacks such as limiting diplomatic and strategic options, as well as the risk of ineffectiveness when other nations refuse to enforce comparable financial retaliations.

As a researcher, I would advise the following: The United States possesses an effective means to express its disapproval towards Nigeria’s misuse of police power, while simultaneously withholding substantial funds that were previously earmarked for these authorities. In reaction to the unwarranted accusations against Gambaryan, I recommend that the United States promptly halt the disbursement of seized assets to Nigeria under the Department of Justice’s “international sharing” program.

International sharing of forfeited assets

The Justice Department works closely with law enforcement bodies around the globe each day. Their collaborations encompass joint probes and initiatives spanning from counter-terrorism to transnational money laundering, cybercrime, and other areas. In the Department’s mission to combat international kleptocracy and its repercussions on American businesses and global communities, international alliances prove essential.

One method for enhancing international collaboration, enshrined in U.S. legislation, allows the DOJ (and on specific occasions, the Department of the Treasury) to bestow rewards upon foreign allies for their assistance in criminal investigations. This is accomplished through the distribution of seized assets – the proceeds of ill-gotten gains taken by the DOJ during prosecutions – to these partners. The guidelines specifying when, how much, and to whom these confiscated assets may be distributed are primarily dictated by treaties or other agreements, and necessitate the approval of the Attorney General (or Secretary of the Treasury) as well as the endorsement of the Secretary of State.

See also: Binance Exec Tigran Gambaryan Denied Bail

Significantly, these programs offer the Attorney General or the Treasury Secretary the discretionary authority to transfer forfeited property to any collaborating foreign country. Upon implementation, such asset transfers can carry profound symbolic and tangible implications for international partners. For instance, a recent cooperative agreement between the US and Estonia resulted in the transfer of funds to Ukraine – an act imbued with significant symbolism and substance.

The withholding of such transfers consequently carries a similar moral and material weight.

Nigeria and international sharing

Nigeria has once more levied money laundering allegations against Gambaryan, an ordinary worker at Binance with no discernible connection to his alleged wrongdoing. Remarkably, in fiscal year 2023, the Department of Justice transferred approximately $20 million to Nigeria through its international aid program. In contrast, the transfer amounted to over $310 million in the year 2020. This trend needs to be curbed.

Under the international sharing protocols, the DOJ, Treasury, and State Department have the discretionary authority to halt these transfers. They ought to exercise this power when it becomes clear that the purpose of the program – which is to encourage foreign partners to respect the rule of law by collaborating with U.S. law enforcement – is undermined by blatantly unjust, arbitrary prosecutions.

As a researcher studying the Binance situation and its implications for U.S.-Nigeria relations, I would propose the following: By halting forfeiture transfers to Nigeria, the U.S. government imposes a tangible cost directly on Nigerian authorities and their legal system implicated in this affair. This action does not necessitate intermediaries or multilateral cooperation to be effective; it’s a unilateral move that can deter potential future misconduct without involving banks or foreign partners, unlike formal sanctions against specific individuals or institutions in Nigeria would require.

The flexible nature of the initiative allows for room for negotiation and diplomatic maneuvering. Unlike typical economic sanction regimes, there’s no requirement to publicly reverse previous designations. Instead, U.S. authorities would merely resume collaborative efforts upon a clear-cut change in Nigeria’s actions – specifically, the liberation and vindication of an unfairly imprisoned American national.