Etiket: Was

After eight long, harrowing months locked up in a Nigerian prison, Tigran Gambaryan is finally back home in Atlanta, recovering from his ordeal.

The Nigerian government finally agreed to release Gambaryan on humanitarian grounds in October to allow him to return to the U.S. to receive medical care for a host of conditions he developed while in Kuje prison including malaria, double pneumonia, and a herniated disc in his back that left him in excruciating pain and struggling to walk.

In addition to releasing Gambaryan, Nigerian officials dropped the money laundering charges they’d been prosecuting him for since March, as a stand-in for his employer, Binance. The Nigerian government accused Binance of tanking the value of the naira by facilitating the movement of some $23 billion in untraceable funds in 2023. Equally unjust tax evasion charges against Gambaryan had previously been dropped in June. Binance, however, still faces both charges; the Nigerian government is seeking $10 billion in penalties.

Gambaryan’s detention sparked outrage across the crypto industry and beyond. As Binance’s Head of Financial Crime Compliance, Gambaryan had nothing to do with his employer’s actions, criminal or not, in Nigeria. And, as an American citizen, it was unthinkable for many, including several members of Congress, that he could be snatched by a foreign country – especially one that is an ally of the U.S. – and left to languish in a cell for nearly a year.

And, perhaps most perplexingly, Gambaryan wasn’t just any American executive getting held for ransom – he’s a former federal agent, a one-time Internal Revenue Service (IRS) investigator that was part of an elite group of early crypto tracers in the federal government. During his tenure at the IRS, Gambaryan had a central role in some of the biggest crypto crime busts in the industry’s history, including the takedown of child sex abuse video network Welcome to Video and darknet marketplace Alpha Bay, the seizure of nearly 70,000 bitcoins stolen from the Silk Road, and the recovery of 650,000 bitcoins stolen from Mt Gox.

That Nigeria would detain any American executive to use as a scapegoat for their employer was bad enough. But that Nigeria detained Tigran Gambaryan, a former U.S. government employee, was an outrage.

Star investigator

Gambaryan’s detention came as a shock to many of his former government colleagues, including Lili Infante, CEO of CAT Labs. During her tenure as a special agent at the Drug Enforcement Agency (DEA), Infante frequently crossed paths with Gambaryan, working with him on investigations and sharing investigative techniques.

“Tigran is a very rare breed of elite investigator,” Infante said. “It’s very difficult to find his personality type in the government. If IRS-CI had the equivalent of a special forces, he would probably be front and center leading them.”

Infante, along with Gambaryan, was part of an elite cadre of early crypto tracers working across several government agencies who figured out how to track transactions that were, at the time, largely thought to be anonymous. And, of all the federal agencies developing cutting-edge crypto tracing techniques, the IRS was the best.

“They were accountants. They were really good at following the money, and this was just following the money on blockchains,” said Ari Redbord, global head of policy at blockchain intelligence firm TRM Labs. “And Tigran really became the star amongst that group of agents in those early days… In large part, he invented what it means to be a cryptocurrency investigator.”

Infante said that Gambaryan was “instrumental” in catapulting IRS-CI into being the leading federal agency in crypto investigations.

“Not only did he work on some of the most impactful, high profile crypto cases, which resulted in multi-billion dollars of digital asset seizures, he also mentored other agents and laid the groundwork for IRS-CI to continue dominating in the area of crypto investigations even after he left [for Binance],” Infante said. “He left a legacy.”

Infante attributes part of Gambaryan’s success at the IRS to his personality, which she and other former colleagues of his described as driven, ambitious and innovative.

“He’s like a dog with a bone. No challenge is too difficult,” Infante recalled. “The government was lucky to have him. It’s very, very difficult to innovate in the government because of the level of bureaucracy…Innovation requires a certain level of risk tolerance which Tigran had, and still does. Sometimes it pays off, and sometimes it bites you.”

Pioneer at Binance

When Gambaryan left the IRS and took a position at Binance in 2021, Infante said she wasn’t surprised. By the time he left the government, the crypto investigative space had matured significantly, and Gambaryan was ready for a new challenge.

And Binance presented a significant challenge, even for the OG crypto investigator. When Gambaryan joined the company, it was still willingly violating the Bank Secrecy Act (BSA) by failing to set up a proper know-your-customer/anti-money laundering regime, which allowed money launderers and international criminals to use the platform freely. Last year, the company agreed to pay $4.3 billion in fines to settle criminal charges against it, and then-CEO Changpeng “CZ” Zhao was sentenced to four months in federal prison — half the time that Gambaryan ended up serving in Nigeria.

Though Gambaryan was well aware of Binance’s troubles, he took the job anyway.

“He said, ‘Well, it’s the largest exchange. They have the most impact on the industry right now, and I want to help them get their shit together,’” Infante recalled Gambaryan saying before he left the IRS. “And he wasn’t kidding.”

Redbord pointed out that, though it is now common for government officials to take jobs in the crypto industry, it was “pretty extraordinary” when Gambaryan joined Binance.

“He’s a man of firsts,” Redbord said. “This was a very unique thing at the time. Not only did he go to a cryptocurrency business, he went to the largest by a magnitude of 15, and one that was really having to rethink the way it did anti-money laundering and compliance. And he came in and really became the face of that in many respects.”

Infante pointed to the exchange’s response process to law enforcement inquiries as an example of how Gambaryan had positively changed Binance.

“It’s night and day. Before Tigran came in, you’d send a request or a subpoena and you’d wait a month or two or six or forever — the compliance program was nonexistent,” Infante said. “After Tigran came in, you’d get an answer within 24 hours.”

“Imagine taking a borderline criminal organization and turning it into a force for good to help law enforcement with their cases, be extremely compliant with subpoena requests, helping return assets to victims of cybercrime and pig butchering – it’s an impact. It’s a massive impact,” Infante added.

A spokesperson for Binance said Gambaryan brought “unparalleled expertise” to the exchange when he joined in 2021.

“His contributions have solidified Binance’s position as a leader in compliance and innovation within the cryptocurrency ecosystem,” the spokesperson added.

Colleagues, Congressmen push back

For many in the crypto industry, especially for compliance officers and former government officials, Gambaryan’s stellar track record made his detention in Nigeria — and the U.S. government’s disturbingly lackluster response — even more incomprehensible.

“Nobody should go through what he went through, but the fact that he’s literally a national treasure…and it took us eight months to get him out of a hostage situation in another country is insane,” said Infante.

Infante and Redbord joined a group of former federal agents and prosecutors that worked, behind the scenes and in public, to secure Gambaryan’s freedom. They both signed a letter, spearheaded by investor and former federal prosecutor Katie Haun to Secretary of State Antony Blinken, asking the State Department to “step up” its efforts to get Gambaryan home. Some of Gambaryan’s former government colleagues also protested outside the UN in September and regularly posted on social media demanding his freedom.

Read more: Former Government Employees, Compliance Officers Rally for Detained Binance Executive

Their efforts to free Gambaryan also attracted people who didn’t know him before his detention.

Gary Weinstein, founder of Infinity Consulting, told CoinDesk he worked pro bono for four hours a day for months to help free Gambaryan.

“I felt a personal responsibility to act. I think Tigran’s dedication to compliance and integrity resonated with my values,” Weinstein said. “I couldn’t just sit by hoping for a good result.”

Members of Congress also took steps to advocate for his release. Sixteen members of Congress signed a June 2024 letter to President Joe Biden, Blinken, and Roger Carstens, the Special Presidential Envoy for Hostage Affairs, urging them to take “immediate action” to get Gambaryan released.

Rep. French Hill (R-Ark.), who signed the letter, and Rep. Chrissy Houlahan (D-Penn.) traveled to Nigeria to visit Gambaryan in prison in June.

Poorly handled

Though Gambaryan was ultimately released, many of those involved in advocating for his freedom remain frustrated by the way that his situation was handled by the Biden Administration.

Infante credited Hill and Rep. Rich McCormick (R-Georgia), Gambaryan’s congressman, with advocating for his release on Capitol Hill, but stressed that their degree of involvement should not have been necessary.

“Something like that happens to me, God forbid, I hope I have a representative like Rich McCormick to fight for me,” Infante said. “But they can only do so much. Because, really, it should have been a phone call from the President. It could have been resolved very early on, in my opinion, and it wasn’t. It wasn’t prioritized, and it should have been. That’s where the frustration lies – with the White House.”

Though a spokesperson for Binance said the company doesn’t believe Gambaryan’s situation was “unique to the crypto industry,” others, including Amanda Wick, a former money laundering process who now works as a crypto consultant, believe Gambaryan’s employment in the crypto industry was part of the reason the White House dragged its feet freeing him.

“Just look at all the things about him: he was a former IRS agent that had served his country as a law enforcement agent, he was a compliance officer and he was an American. And all of that was getting subsumed and ignored because he was in crypto.”

While the government ultimately secured Gambaryan’s release, the lack of transparency throughout the negotiation process left many people closely watching the situation — including Rep. Hill — frustrated.

“Tigran is back where he belongs – home with his family in America. I remain deeply disappointed that an American business executive was held under horrible conditions on unsubstantiated charges by Nigeria, a nation that the United States considers a friend,” Hill told CoinDesk.

On November 19, Hill introduced a bill, the American Detainee Transparency and Recovery Act, aimed at increasing the transparency in the recovery process.

“Tigran should have never been wrongfully detained by the Nigerian government in the first place and his case should be an example to the incoming Trump administration of how not to treat Americans who are taken by our friends and allies,” Hill said.

Chilling effect

Wick and others said that Gambaryan’s situation is likely to create a chilling effect across the industry, and perhaps beyond, when it comes to sending American employees to foreign countries on business.

At the September protest at the UN, Wick said one of the attendees was a man who did not know Gambaryan personally, but worked in compliance at a traditional finance firm.

“Most of us were former prosecutors and agents – crypto people who either knew Tigran or were in that community. But there was a guy who came [to the protest] who used to be at Wells Fargo, and he came because it could have been him,” Wick said.

“People forget that, at the end of the day, he was just a compliance employee who was kidnapped in a foreign country for the compliance failures of his financial institution,” Wick added. “And the only reason why people were so comfortable with it was because Binance was a crypto company…but if it had been TD Bank? If it had been Wells Fargo, and an American had just been kidnapped because of the company he worked for not having a sufficient AML program and then held in a prison with terrorists? If you say it out loud, it’s ridiculous.”

Weinstein said Gambaryan’s situation raises a “huge issue” — that foreign governments, including those allied with the U.S., might feel emboldened to target and detain compliance officers without just cause to hold them as bargaining chips.

“It sets a dangerous precedent that could deter talented professionals from entering the field, engaging and frankly, is a setback for the industry’s growth and its efforts to build trust with regulators,” Weinstein said.

“Tigran’s wrongful detention was a wake up call for the entire crypto industry, and it highlighted vulnerabilities that compliance officers and professionals face when engaging with international regulators.”

Moving forward

Gambaryan is now at home and focusing on his recovery. A spokesperson for his family declined CoinDesk’s request for an interview for this story, citing his ongoing recovery.

“There is an overwhelming sense of relief and gratitude among the Binance team. Tigran’s safe return is not just a moment of personal joy but also a collective victory for those who supported him throughout this ordeal,” a Binance spokesperson said.

“That said, we remain deeply concerned about his health and are focusing right now on providing support to help him and his family during this time of healing.”

This profile is part of CoinDesk’s Most Influential 2024 package. For all of this year’s nominees, click here.