The Federal Government has petitioned an Abuja Federal High Court to mandate the cryptocurrency platform, Binance, to remit N79.51 billion and N231 million, which collectively amount to $81.5 billion, as a punitive measure for purported economic detriment attributed to its operations within Nigeria.
The plaintiff, the Federal Inland Revenue Service, in a legal filing identified as FHC/ABJ/CS/1444/2024, is concurrently pursuing the payment of $2.001 billion in income taxes applicable to the fiscal years 2022 and 2023.
In the legal action, Binance and two of its senior executives, Tigran Gambaryan and Nadeem Anjarwalla, are charged with violating Nigerian statutes, which encompass the failure to register with the nation’s tax authority, FIRS, for tax compliance purposes and allegedly inflicting economic damages upon the country during the specified review period.
CREEBHILLS indicates that this legal action constitutes the third lawsuit presently pending before the trial court against Binance.
The FIRS, along with the Economic and Financial Crimes Commission, has previously accused the firm of tax evasion, money laundering, and violations related to foreign exchange before Justice Emeka Nwite of the Federal High Court situated in Abuja.
The financial claims articulated in the lawsuit comprise a 10 percent penalty for the non-payment of taxes for the years 2022 and 2023, alongside a 26.75 percent interest rate (reflecting the prevailing lending rate of the Central Bank of Nigeria) per annum commencing from January 1, 2023, and January 1, 2024, respectively, in addition to other penalties.
In the most recent lawsuit, the FIRS contends that Binance has obscured its business operations within Nigeria, notwithstanding its considerable economic footprint in the nation.
The Federal Government further alleges that Binance has transgressed Nigeria’s Companies Income Tax Act, the Federal Inland Revenue Service (Establishment) Act 2007, the CBN Regulatory Framework for Mobile Money Services, and the CIT Significant Economic Presence (SEP) Order.
The SEP Order, executed by former Finance Minister Zainab Ahmed and published in May 2020, delineates significant economic presence as that of foreign entities generating no less than N25 million annually from digital services rendered in Nigeria.
An affidavit submitted by Jimada Yusuf, a member of the Special Investigation Team from the Office of the National Security Adviser, disclosed that Binance has been operational in Nigeria for a period exceeding six years without the requisite registration.
Yusuf asserted that during a meeting in 2024 with the Securities and Exchange Commission, Binance executives (Anjarwalla and Gambaryan) acknowledged the existence of 386,256 active Nigerian users on its platform, with a trading volume of $21.6 billion and net revenues of $35.4 million for the year 2023.
Consequently, the affidavit also charged Binance with operating devoid of requisite licenses and permits, failing to comply with the Money Laundering Act, providing unauthorized financial services, and engaging in currency speculation activities.
The NSA contended that Binance unlawfully listed and facilitated the trading of the Nigerian Naira on its platform, despite assertions that it had retracted the currency following investigative scrutiny.
The affidavit further alleges that Binance has declined to furnish comprehensive business records for a span of six years, notwithstanding a Federal High Court directive mandating the disclosure of such information to the FIRS through the EFCC.
The FIRS, represented by lead counsel Kanu Agabi, SAN, was present in court on February 11, 2025, when the suit was called upon for a hearing before Justice Inyang Ekwo; however, Binance’s legal team was absent.
Agabi informed the court that attempts to serve Binance directly had been unsuccessful, and he had filed a motion for substituted service on them.
Justice Ekwo granted the motion and directed that substituted service be carried out within seven days. The case was adjourned to March 3, 2025.
FIRS is seeking the following reliefs in the suit: “A declaration that Binance is liable to pay annual corporate income tax for having a significant economic presence in Nigeria.
“A declaration that Binance and its executives must file income tax returns for 2022 and 2023. An order compelling Binance to pay $2.001 billion in taxes for 2022 and 2023.
“Penalties, including 10 percent annual interest and a 26.75 percent CBN lending rate, until the taxes are fully paid. Compensation of $79.51 billion and N231 million for economic losses.”
