…Demands $2billion in Unpaid Taxes
The Federal Government of Nigeria has sued cryptocurrency exchange company Binance Holdings Limited, demanding $79.51 billion and ₦231 million in damages for alleged economic losses resulting from its operations in the country.
The Federal Inland Revenue Service, in a charge marked FHC/ABJ/CS/1444/2024, is also demanding $2.001 billion in income taxes for 2022 and 2023.
Binance and its executives, Tigran Gambaryan and Nadeem Anjarwalla, are accused of violating Nigerian laws, including failure to register with the FIRS for tax compliance.
This lawsuit is the third currently before the Federal High Court in Abuja against Binance.
The FIRS and the Economic and Financial Crimes Commission have also charged the company with tax evasion, money laundering, and foreign exchange violations before Justice Emeka Nwite.
The lawsuit includes penalties for non-payment of taxes, interest rates based on the Central Bank of Nigeria’s lending rate, and other financial sanctions.
The FIRS alleges that Binance concealed its business activities despite having a significant economic presence in Nigeria.
The government accuses Binance of breaching the Companies Income Tax Act, the FIRS Establishment Act 2007, the CBN Regulatory Framework for Mobile Money Services, and the CIT Significant Economic Presence Order, which requires foreign companies earning at least ₦25 million annually from digital services in Nigeria to pay taxes.
An affidavit deposed by Jimada Yusuf, a member of the Special Investigation Team from the Office of the National Security Adviser, states that Binance had been operating in Nigeria for over six years without registration.
Yusuf revealed that during a 2024 meeting with the Securities and Exchange Commission, Binance executives admitted to having 386,256 active Nigerian users, with a trading volume of $21.6 billion and net revenue of $35.4 million for 2023.
The affidavit also accuses Binance of operating without required licenses, violating the Money Laundering Act, offering unauthorised financial services, and providing currency speculation services.
The National Security Adviser alleges that Binance unlawfully listed and traded the Nigerian Naira on its platform even after claiming to have delisted the currency following investigations. The affidavit further states that Binance refused to provide six years’ worth of business records despite a Federal High Court order mandating their disclosure to the FIRS via the EFCC.
When the suit was called for a hearing on February 11, 2025, before Justice Inyang Ekwo, Binance’s legal team was absent, while the FIRS, represented by lead counsel Kanu Agabi, was present.
Agabi informed the court that attempts to serve Binance had been unsuccessful, prompting him to file a motion for substituted service. Justice Ekwo granted the motion, directing that substituted service be carried out within seven days. The case was adjourned to March 3, 2025.
The FIRS is seeking a declaration that Binance is liable to pay annual corporate income tax for having a significant economic presence in Nigeria, along with an order compelling the company to pay outstanding taxes for 2022 and 2023. The agency is also demanding penalties, including annual interest and CBN lending rate charges, until the taxes are fully paid, alongside compensation for the alleged economic losses.
