In a significant legal move, the Nigerian government has filed a lawsuit against Binance Holdings Limited, seeking a staggering $81.5 billion in damages. This comprises $79.5 billion for alleged economic losses and an additional $2 billion in back taxes for the years 2022 and 2023. The lawsuit, filed by the Federal Inland Revenue Service (FIRS) at the Federal High Court in Abuja, marks the third legal action against the cryptocurrency giant in Nigeria.
Central to the government’s allegations is Binance’s purported failure to register with Nigerian tax authorities, despite maintaining a “significant economic presence” in the country. The FIRS contends that Binance’s operations violated several national laws, including the Companies Income Tax Act and the Federal Inland Revenue Service (Establishment) Act 2007. Additionally, the company is accused of breaching the Central Bank of Nigeria’s Regulatory Framework for Mobile Money Services and the Significant Economic Presence (SEP) Order, which mandates that foreign entities earning over ₦25 million annually from digital services in Nigeria must pay taxes.
The affidavit supporting the lawsuit, deposed by Jimada Yusuf of the Office of the National Security Adviser, reveals that Binance has been active in Nigeria for over six years without proper registration. During a 2024 meeting with the Securities and Exchange Commission, Binance executives reportedly disclosed having 386,256 active Nigerian users, a trading volume of $21.6 billion, and net revenue of $35.4 million for the year 2023. These figures underscore the substantial role Binance plays in Nigeria’s digital economy.
The legal challenges facing Binance in Nigeria are multifaceted. Beyond the current lawsuit, the company and its executives, including Tigran Gambaryan and Nadeem Anjarwalla, have been implicated in cases of tax evasion, money laundering, and foreign exchange violations. Notably, in 2024, Gambaryan was detained under contentious circumstances, leading to significant diplomatic interventions. He was released after eight months, with the Nigerian government citing health and diplomatic reasons for dropping the charges.
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Binance has consistently refuted the allegations, asserting its commitment to compliance and cooperation with Nigerian authorities. The company has expressed its intention to work closely with the FIRS to address any historical tax liabilities and resolve the ongoing disputes amicably. However, the magnitude of the claims and the potential financial repercussions highlight the escalating tensions between cryptocurrency platforms and regulatory bodies in regions like Nigeria.
This lawsuit underscores the broader challenges that global cryptocurrency exchanges face as they navigate complex regulatory environments. As nations grapple with the rapid evolution of digital finance, the balance between fostering innovation and ensuring regulatory compliance remains a delicate and pressing issue.
