The Gambaryan Episode: On Rule of Law and Rumor of Corruption
On October 24, 2024, Binance employee Tigran Gambaryan left Nigeria after an eight-month detention which saw his health decline significantly. Gambryan was arrested in late February 2024 along with his colleague, Nadeem Anjarwalla, who served as a regional head for Africa at Binance.
Both men were arrested on money laundering charges, and Binance ceased operations in Nigeria on March 8, 2024. Anjarwalla escaped custody on March 22, 2024.
Having taken months to recover, Gambaryan is back and has told his side of the story. A long read of his experience was published in WIRED on February 10, 2025, and Gambaryan himself took to social media to make other allegations of bribery against specific officials.
The Nigerian government denied those allegations of bribery and tried to discredit Gambrayan. As a former federal law enforcement officer, the american is highly regarded as a key figure in the fight against the dark side of crypto while at the FBI. He was reported to have moved to Binance to clean up their operation and cooperate with law enforcement agencies from various countries and in various investigations.
What his prolonged detention and his narration of his ordeal have done is to bring Nigeria’s criminal justice, corruption and rule of law problems into focus once again.
Rule of law and due process
The ordeal of Gambaryan will be familiar to many Nigerians, either directly or indirectly. Stories abound of illegal arrest, detention and extortion by the Nigerian Police and other arms of the criminal justice system. Indeed, the discontent as a result of these occurrences led to the EndSARS protests in 2020, which came to an end after yet another act of brutality by security forces.
These news stories typically detail the ordeal of Nigerians who were wrongfully arrested and spend months in detention before having their day in court, only to be released after spending years in prison for crimes they did not commit. Often, these victims have little recourse. Court orders given in their favour are not honoured by the security agencies and they are largely allowed to operate with impunity.
The main reason Gambaryan stayed in jail for so long appeared to be the fact that Binance did not turn over all its data on Nigerians transacting on its platform. It is unclear to what purpose the government intended to put this information but it could border on the delicate balance between state security and a severe breach of data privacy laws.
Nigeria’s challenges with the rule of law are not just anecdotal. They show up in various metrics. The World Justice Project’s Rule of Law Index compares 142 countries in eight measures: Constraints on Government Powers, Absence of Corruption, Open Government, Fundamental Rights, Order and Security, Regulatory Enforcement, Civil Justice and last but not least, Criminal Justice.
Also, the rule of law in the country has experienced a steady decline since 2016. In one sense, it is a decline that mirrored most of the rest of the world, but in Nigeria’s case, it was never high to begin with, and even little aspects of progress have been rolled back.
The decline of Nigeria’s rule of law is also reflected in the Ibrahim Index of African Governance (IIAG), a governance index which focuses only on African countries. Nigeria has declined 12 points in its rule of law subcategory since 2016. In the same time frame, the continental average for rule of law has declined only 1.4 points.
Rumor of Lawmaker’s Corruption
One of the news-making aspects of Gambaryan’s ordeal was the money allegedly demanded by three House of Representatives members to broker his release. The amount requested was $150 million. In a hilarious irony, one of the lawmakers whom Gambaryan alleged was demanding money is the chairman of the house committee on anti-corruption.
On the corruption metrics in the IIAG, Nigeria scores 20 out of 100 for both ‘Absence Of Corruption In State Institutions’ and ‘Public Perception of Anti-Corruption’. For Public Perception of Rule of Law, it scores only 13.5 out of 100. In terms of overall governance, Nigeria ranks 33rd out of 54 African countries on the index.
What is the cost of corruption to Nigerians? That cost is significant. In its 3rd national corruption survey released in 2024, the National Bureau of Statistics estimated that $1.26 billion (₦721 billion at the time) in bribes were paid to various officials, with the police and judges being the most corrupt. That is a significant transfer of wealth. It amounts to 0.35% of Nigeria’s GDP in 2023.
The cost to the country is greater still. Corruption increases the cost of doing business in a country with an already difficult operating environment and as a result, it reduces the number of companies that can invest in that country. This is because it is harder for firms from less corrupt countries to do business in corrupt countries, thus shrinking the pool of potential investment into the country.
‘A tolerable administration of justice’
The focus on the rule of law this week is not an abstract thing. To enable the large-scale cooperation that brings progress, all players – individuals, businesses and governments – need to abide by a specific set of rules. These rules build trust across society. That trust leads to cooperation and thus progress.
No one, including Tigran Gambaryan and Nadeem Anjarwalla, can be assured of justice in a society that operates essentially on the whims of whoever is in power at that moment, a person or people who can make life very difficult for you if you get on their wrong side for any reasons, be they reasonable or otherwise. On top of that, once caught on their wrong side you have little recourse unless a literally superior force is brought to bear, which in their case was the power of the US government.
There are many people and businesses in Nigeria who do not have such power at their disposal, and as such have been swallowed up by the system. We read their stories on social media, if they are lucky enough to be able to tell those stories.
In order to truly become the economic powerhouse it can be, the rule of law must be upheld at all levels of society. One quote by Adam Smith said it best: "Little else is requisite to carry a state to the highest degree of opulence from the lowest barbarism but peace, easy taxes, and a tolerable administration of justice: all the rest being brought about by the natural course of things."
For now, Nigeria’s administration of justice is intolerable.
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