Toba Owojaiye reporting
Abuja, Nigeria
The Federal Government of Nigeria has filed a lawsuit against Binance Holdings Limited at the Federal High Court, accusing the cryptocurrency exchange giant of tax evasion, money laundering, and violations of financial regulations.
Truth Live News gathered that the Federal Inland Revenue Service (FIRS) is demanding $2.001 billion in unpaid income taxes for 2022 and 2023, alongside additional penalties. This latest legal action, marked as suit FHC/ABJ/CS/1444/2024, is the third in a series of litigations against Binance in Nigeria.
The FIRS, in its submission, stated that Binance and its executives, Tigran Gambaryan and Nadeem Anjarwalla, failed to register the company with Nigerian tax authorities, thus evading tax obligations while conducting large-scale digital transactions in the country. The government is also seeking compensation of $79.51 billion and N231 million for alleged economic losses attributed to Binance’s operations.
The suit includes a 10 percent penalty for non-payment of taxes for the stated period, along with an annual interest rate of 26.75 percent, which aligns with the Central Bank of Nigeria’s (CBN) prevailing lending rate from January 1, 2023, and January 1, 2024, respectively.
Binance is accused of breaching multiple Nigerian laws, including:
The Companies Income Tax Act (CITA)
The Federal Inland Revenue Service (Establishment) Act 2007
The CBN Regulatory Framework for Mobile Money Services
The CIT Significant Economic Presence (SEP) Order, which mandates foreign companies earning at least ₦25 million annually from digital services in Nigeria to pay taxes.
The lawsuit follows a broader crackdown on cryptocurrency exchanges by Nigerian authorities, citing concerns over their role in forex speculation, illicit financial flows, and tax evasion. Binance has been under intense scrutiny since February 2024, when the Central Bank of Nigeria (CBN) and the Economic and Financial Crimes Commission (EFCC) launched investigations into the platform’s role in Nigeria’s foreign exchange market instability.
In a dramatic escalation, Binance executives Tigran Gambaryan and Nadeem Anjarwalla were detained in late February as part of the investigation. Anjarwalla, a British-Kenyan national, reportedly escaped custody in March, further complicating the case. Gambaryan remains in detention, with Nigerian authorities pressing criminal charges against him and Binance.
The Nigerian government has increasingly voiced concerns over the unregulated nature of cryptocurrency transactions, particularly their impact on the naira’s volatility. Authorities argue that platforms like Binance facilitated illegal foreign exchange transactions, leading to currency depreciation and financial instability.
As part of efforts to regulate digital assets, the Nigerian Securities and Exchange Commission (SEC) issued new rules in 2022, requiring cryptocurrency exchanges to register with the agency and adhere to local financial laws. Binance, however, allegedly continued operations without compliance.
Binance has maintained that it is committed to regulatory compliance and has engaged with Nigerian authorities to resolve the dispute. However, the company has faced mounting legal challenges globally, with similar allegations in the U.S. and other jurisdictions.
The ongoing lawsuit and Binance’s regulatory woes in Nigeria signal a broader effort by the government to assert control over the digital financial ecosystem and enforce tax compliance. The case is being closely watched by industry stakeholders, as its outcome could set a precedent for the treatment of cryptocurrency exchanges in Nigeria and beyond.
For now, Binance faces an uphill battle in defending itself against accusations that could carry significant financial and legal consequences because of the political dimensions to the saga.
