The Federal Government has filed a suit at a Federal High Court in Abuja to mandate the cryptocurrency exchange company, Binance Holdings Limited, to pay $79.51bn and N231m for alleged economic losses caused by its operations in Nigeria.
The government is also seeking payment of $2bn in income taxes for 2022 and 2023.
The Federal Inland Revenue Serviceis the plaintiff in the suit marked FHC/ABJ/CS/1444/2024,in which
Binance and two of its executives, Tigran Gambaryan and Nadeem Anjarwalla, were accused of fouling Nigerian laws, including failing to register with FIRS for tax compliance and allegedly causing economic losses to the country during the review period.
Besides,the FIRS and the Economic and Financial Crimes Commission charged the company with tax evasion, money laundering, and foreign exchange violations before Justice Emeka Nwite of the Federal High Court in Abuja.
The claims in the lawsuit include a 10% penalty for non-payment of taxes for 2022 and 2023, a 26.75% interest rate (the prevailing Central Bank of Nigeria lending rate) per annum from January 1, 2023, and January 1, 2024, respectively, among other penalties.
The FIRS alleged that Binance concealed its business activities in Nigeria, despite having a significant economic presence in the country.
It also accused Binance of breaching 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 Order.
The SEP Order, signed by former finance minister Zainab Ahmed and gazetted in May 2020, defines significant economic presence as foreign companies deriving at least N25m annually from digital services in Nigeria.
An affidavit deposed to by Jimada Yusuf, a member of the Special Investigation Team from the Office of the National Security Adviser, disclosed that Binance had been operating in Nigeria for over six years without registration.
He stated that during a 2024 meeting with the Securities and Exchange Commission, Binance executives (Anjarwalla and Gambaryan) admitted to having 386,256 active Nigerian users on its platform, with a trading volume of $21.6bn and net revenue of $35.4m for 2023.
Yussuf’s affidavit also accuses Binance of operating without required licences and permits, non-compliance with the Money Laundering Act, offering unauthorised financial services, providing currency speculation services.
The affidavit said Binance unlawfully listed and traded the Nigerian Naira on its platform, even after claiming it had delisted the currency following investigations.
It further alleged that Binance refused to provide detailed business records spanning six years, despite a Federal High Court order mandating disclosure to FIRS via the EFCC.
Specifically, FIRS is seeking “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 $2.001bn in taxes for 2022 and 2023.
“Penalties, including 10% annual interest and a 26.75% CBN lending rate, until the taxes are fully paid. Compensation of $79.51bn and N231m for economic losses.”
