TheChek News Flow

West African country steps up scrutiny of world’s largest cryptocurrency exchange

Nigeria has charged Binance and two of its executives with tax evasion, including one that escaped custody, escalating the legal stand-off between the African nation and the world’s largest cryptocurrency exchange.

Tax authorities alleged that Binance, which is unregulated in Nigeria, has not filed tax returns nor paid value added or corporation tax, according to a statement by the country’s Federal Inland Revenue Service.

The charges, which were filed on Friday, mark the latest twist in Binance’s protracted dispute with the Nigerian authorities as the government seeks to head off its worst economic crisis in three decades and restore its citizens’ faith in its battered currency.

Cryptocurrency exchange sites have become alternative marketplaces to set an unofficial price for the naira, and Binance is the most used in the country. Nigeria has also held two Binance executives for four weeks following a clampdown on crypto exchanges in February.

FIRS said Binance had helped its Nigeria-based users evade paying taxes. Binance did not respond to a request for comment relating to the accusation of tax evasion.

As the crackdown was stepped up last month, the two senior Binance executives who had flown into the country to discuss the situation were then detained. The men, Nadeem Anjarwalla, a UK citizen, and Tigran Gambaryan, a US citizen, had their passports seized.

A spokesperson for the family of Anjarwalla told the Financial Times he had left custody on Saturday and left Nigeria “by lawful means”.

In the early stages of negotiations following the executives’ arrest, the office of Nigeria’s national security adviser asked Binance to resolve outstanding tax liabilities, according to documents seen by the Financial Times.

Nigeria has requested that Binance provide information on its top 100 users in the country and all transaction history for the past six months.

The NSA confirmed on Monday that Anjarwalla had escaped on Friday and said he was using a “smuggled” passport. “Security agencies are working with Interpol for an international arrest warrant on the suspect,” the office said.

“The personnel responsible for the custody of the suspect have been arrested, and a thorough investigation is ongoing to unravel the circumstances that led to his escape from lawful detention,” it added.

A source familiar with the matter said Anjarwalla, who is also a Kenyan citizen, may have travelled using his Kenyan passport.

“We were made aware that Nadeem is no longer in Nigerian custody,” Binance told the FT. “Our primary focus remains on the safety of our employees and we are working collaboratively with Nigerian authorities to quickly resolve this issue,” they added.

The NSA said it would launch an investigation into Anjarwalla’s escape.

“The federal government of Nigeria, like other governments around the world, has been investigating money laundering and terrorism financing transactions perpetrated on the Binance currency exchange platform,” it added.

The two executives were due to remain in detention until April 4, when a court hearing into their future is scheduled to take place. Both men were initially held under a court order that permitted their detention for a period of 14 days that ended on March 12.

Finma uncovers millions of francs in unexplained payments by Banque Audi to senior political figures

Swiss authorities have censured Lebanon’s largest bank for serious money laundering violations, after uncovering millions of francs in unexplained payments to senior political figures routed through the wealthy alpine country.

The investigation into Bank Audi by Finma, Switzerland’s market regulator, was triggered by a corruption probe into Riad Salameh, the former longtime governor of Lebanon’s central bank, according to people familiar with the matter.

Salameh, who has denied all allegations of misconduct, was charged by prosecutors in Beirut in 2022 with embezzling more than $330mn in public funds.

He is also under criminal investigation in Switzerland and seven other jurisdictions, probing allegations of financial crimes. These include France and Germany, which have issued warrants for his arrest. He stepped down from his post last summer.

In a statement on Monday, Finma said it had ordered Banque Audi — the Swiss subsidiary of Bank Audi — to pay back SFr4mn in “illegally generated” profits relating to suspicious transactions and increase its capital buffer by SFr19mn.

Finma — which does not have the statutory power to issue fines — said Banque Audi was also banned into entering into new relationships with “politically exposed persons” or other high-risk corporate clients for the next two years.

The bank has agreed to internal reforms, the regulator said. The staff who approved the transactions have left Switzerland.

Nevertheless “[Banque Audi] has decided to continue certain high-risk client relationships,” Finma noted.

Bank Audi did not respond to a request for comment.

Finma opened its probe in 2021, as part of a broad investigation into 12 Lebanese lenders with Swiss subsidiaries.

An on-site inspection of Banque Audi’s premises in Geneva that year revealed “serious shortcomings in the prevention of money laundering”, Finma said.

The bank was also found to have withheld internal audit findings from the watchdog which had clearly flagged the money-laundering concerns. The bank failed on multiple occasions to report suspicious transactions to Switzerland’s official anti-money laundering body.

In an anonymised example, Finma cited an instance where Banque Audi had accepted a large payment from a Lebanese “politically-exposed person” — known as a PEP in banking terminology — to a Swiss account held by a high-ranking Lebanese official.

The bank did not obtain an adequate explanation of what the payment was for, as money-laundering regulations require.

Finma said there were numerous other such examples relating to sums paid to and by other politically exposed individuals, who had been the subject of press articles about corruption and graft. The bank made no attempts to inquire about the purpose of large transfers made to and from Swiss accounts in their names, Finma said.

Bank Audi has a history of ties to Lebanon’s political elite.

Its founder, Raymond Audi, served as a government minister while maintaining his position as bank chair. Its current board of directors and major shareholders include several PEPs, as well as certain members of the ruling families of the United Arab Emirates and Kuwait.

Lebanon is still mired in one of the worst economic crises of its modern history.

The crisis has forced three-quarters of the population into poverty, while the Lebanese currency has lost more than 95 per cent of its value against the US dollar since the country went into economic meltdown in October 2019 after decades of state-sponsored corruption and financial mismanagement by successive governments.  

The negotiations between Fisker and a large automaker — reported to be Nissan — over a potential investment and collaboration have been terminated, a development that puts a separate near-term rescue funding effort in danger.

Fisker revealed in a Monday morning regulatory filing that the automaker terminated the negotiations March 22. It did not explain why. But the company had to keep the negotiations going as part of one of the closing conditions for a potential $150 million convertible note announced last week. Fisker said in the filing that it will ask the unnamed investor to waive the closing condition.

The startup’s stock plunged 28% after the stock market opened, halting trading.

It’s the latest in a series of ominous signs for the imperiled EV startup. Fisker has struggled to sell its Ocean SUV in the early going, underperforming its own internal sales goals, as TechCrunch reported in January, and forcing a pivot away from a direct sales model. Some of the cars that have been delivered have been affected by a number of quality problems — ones that Fisker has, at times, struggled to solve, according to internal documents.

In February, Fisker laid of 15% of its staff (around 200 people) and last week reported having just $121 million in the bank. The company has paused production and warned investors it would not survive year without a fresh infusion of cash. Fisker had held talks with other automakers, including Mazda, but only Nissan recently remained at the table.

Fisker said Monday morning that it is evaluating other “strategic alternatives” to the potential tie-up with Nissan, including “in or out of court restructurings, capital markets transactions (subject to market conditions), repurchases, redemptions, exchanges or other refinancings of its existing debt, the potential issuance of equity securities, the potential sale of assets and businesses and/or other strategic transactions and/or other measures.”

Danish group seeks to branch out from diabetes and weight loss drugs with Cardior acquisition

Novo Nordisk has struck a €1bn deal for a German biotech developing ribonucleic acid-based therapies to treat heart disease, as the Danish group invests the windfall from its best-selling diabetes and weight loss drugs.

The acquisition of Cardior Pharmaceuticals will give Novo Nordisk a treatment for heart failure in mid-stage trials that targets the root causes of heart disease.

Novo Nordisk, the maker of blockbuster diabetes and weight loss drugs Ozempic and Wegovy, said the transaction was an “important step” in its strategy to “establish a presence in cardiovascular disease”.

Sales of its diabetes and obesity drugs have sent Novo Nordisk’s market capitalisation soaring but the company has also set a goal of diversifying, including into the treatment of cardiovascular diseases.

To do this, the company has launched trials of its weight-loss treatments to show that they can also tackle diseases linked to obesity. Trial results published in November showed that Wegovy led to an 18 per cent decline in risk of death for patients with obesity and cardiovascular disease.

It also has drugs in late stage phase 3 trials for cardiovascular disease, chronic kidney disease and high blood pressure, and it is using acquisitions to boost its expertise in the area. Chief executive Lars Fruergaard Jørgensen told the Financial Times this month that it was assessing deals for biotech companies with mid-stage drugs.

Martin Holst Lange, head of development at Novo Nordisk, said that Cardior’s drug had the “potential to become a first-in-class therapy designed to halt or partially reverse the course of disease for people living with heart failure”.

The acquisition also gives Novo Nordisk more expertise in RNA-based therapies, a growing field in pharmaceuticals. Novo Nordisk purchased Dicerna Pharmaceuticals, a company focused in RNA-based therapeutics, for $3.3bn in 2021.

Biotech companies have in recent years explored how making changes to the RNA — a molecule present in all living cells that has a similar structure to DNA — could lead to new drugs.

In general, RNA makes proteins by using amino acids as code. Some RNA does not code for proteins and Cardior’s drugs target these molecules, which are important in regulating cell activity but can lead to diseases if they stop working normally.

Cardior’s drug has shown improvements in patients with heart failure compared with a placebo, according to early trials. Novo Nordisk plans to start a second mid-stage trial of the Cardior drug to assess its effectiveness in patients with cardiac hypertrophy, where the walls of the heart muscle become thick and inhibit blood pumping.

“We aim to not just alleviate disease symptoms, but to address the root causes of heart failure and restore the normal functioning of the heart,” said Thomas Thum, Cardior’s co-founder.