FIRS Slaps Binance with $79.51bn Lawsuit Over Alleged Economic Losses
By Patience Ikpeme
The Federal Government has escalated its legal battle against cryptocurrency exchange giant Binance Holdings Limited, filing a staggering $79.51 billion and N231 million lawsuit for alleged economic losses stemming from the company’s operations in the country.
The suit, brought by the Federal Inland Revenue Service (FIRS) at the Federal High Court in Abuja, also demands an additional $2.001 billion in unpaid income taxes for the 2022 and 2023 fiscal years.
The case, marked FHC/ABJ/CS/1444/2024, accuses Binance and two of its executives, Tigran Gambaryan and Nadeem Anjarwalla, of operating without proper registration with the FIRS for tax compliance and allegedly violating Nigerian financial regulations.
This marks the third legal action taken against Binance in Nigeria, following previous charges by the FIRS and the Economic and Financial Crimes Commission (EFCC) related to tax evasion, money laundering, and foreign exchange violations, currently before Justice Emeka Nwite of the Federal High Court in Abuja.
The hefty financial penalties outlined in the new lawsuit include a 10% penalty for non-payment of taxes for 2022 and 2023, a 26.75% annual interest rate based on the Central Bank of Nigeria (CBN) lending rate, and further penalties for Binance’s alleged failure to register its business activities in Nigeria.
The government contends that Binance has been operating in Nigeria for over six years without adhering to necessary registration requirements, thereby contravening multiple financial laws.
A key piece of evidence cited in the affidavit sworn by Jimada Yusuf, a member of the Special Investigation Team from the Office of the National Security Adviser (NSA), reveals that Binance executives admitted to having 386,256 active Nigerian users, a trading volume of $21.6 billion in 2023, and net revenue of $35.4 million generated from Nigerian transactions.
The NSA further alleges that Binance has consistently refused to provide comprehensive business records spanning six years, despite a Federal High Court order compelling them to disclose the data to the FIRS through the EFCC. This alleged non-compliance has further fueled the government’s determination to pursue legal action.
The FIRS is seeking several key declarations and orders from the court. These include a declaration that Binance is obligated to pay annual corporate income tax for its Nigerian operations; a court order compelling Binance and its executives to file income tax returns for 2022 and 2023; and an order for Binance to pay $2.001 billion in outstanding taxes.
The lawsuit also seeks to impose penalties, including the 10% annual interest and the 26.75% CBN lending rate, until all taxes are settled.
Critically, the FIRS is demanding a total of $79.51 billion and N231 million in compensation for alleged economic damages suffered by Nigeria as a result of Binance’s operations.
This multi-faceted legal assault underscores the Nigerian government’s resolve to regulate the cryptocurrency sector and ensure compliance with its financial laws.
The outcome of these cases could have significant implications for the future of cryptocurrency trading in Nigeria and potentially set a precedent for other jurisdictions grappling with the regulation of digital assets.
