The Federal Government of Nigeria has filed a lawsuit against Binance, seeking a total of ₦79.51 billion and ₦231 million (equivalent to $81.5 billion) as penalties for alleged economic losses caused by the cryptocurrency platform’s operations in the country.
The Federal Inland Revenue Service (FIRS), in a charge marked FHC/ABJ/CS/1444/2024, is also demanding $2.001 billion in income taxes for 2022 and 2023.
The lawsuit names Binance and two of its executives, Tigran Gambaryan and Nadeem Anjarwalla, accusing them of failing to register with FIRS for tax compliance and causing economic losses during the review period.
Ongoing Legal Battles Against Binance
This lawsuit marks the third case currently before the Federal High Court in Abuja against Binance. The FIRS and the Economic and Financial Crimes Commission (EFCC) have previously charged the company with tax evasion, money laundering, and foreign exchange violations before Justice Emeka Nwite.
The government’s monetary claims in the latest suit include:
- 10% penalty for non-payment of taxes in 2022 and 2023
- 26.75% annual interest rate, based on the Central Bank of Nigeria’s lending rate
- Additional financial penalties
Binance Accused of Concealing Operations and Violating Nigerian Laws
According to FIRS, Binance concealed its business operations despite having a significant economic presence in Nigeria. The company is accused of breaching multiple laws, including:
- Companies Income Tax Act
- FIRS (Establishment) Act 2007
- CBN Regulatory Framework for Mobile Money Services
- CIT Significant Economic Presence (SEP) Order
The SEP Order, signed in May 2020 by former Finance Minister Zainab Ahmed, defines a foreign company’s significant economic presence as generating at least ₦25 million annually from digital services in Nigeria.
An affidavit from Jimada Yusuf, a member of the Special Investigation Team from the Office of the National Security Adviser (NSA), revealed that Binance has operated in Nigeria for over six years without proper registration.
During a 2024 meeting with the Securities and Exchange Commission (SEC), Binance executives, Anjarwalla and Gambaryan, reportedly admitted that:
- 386,256 active Nigerian users were on the platform
- $21.6 billion trading volume was recorded in 2023
- $35.4 million net revenue was generated in 2023
The affidavit further alleges that Binance operated without necessary licenses, failed to comply with the Money Laundering Act, and engaged in unauthorized financial services and currency speculation.
The NSA’s office accused Binance of unlawfully listing and trading the Nigerian Naira, despite claims that it had delisted the currency. Additionally, Binance allegedly refused to provide six years of business records, violating a Federal High Court order directing them to disclose information to FIRS via EFCC.
Court Proceedings and Substituted Service Order
During a February 11, 2025, hearing before Justice Inyang Ekwo, Binance’s legal team was absent, prompting FIRS lead counsel Kanu Agabi (SAN) to request a motion for substituted service due to difficulties in serving Binance directly.
Justice Ekwo granted the motion, ordering Binance to be served within seven days and adjourning the case to March 3, 2025.
The FIRS is seeking several legal remedies, including:
- A declaration that Binance must pay corporate income tax due to its significant economic presence in Nigeria
- An order compelling Binance to file income tax returns for 2022 and 2023
- $2.001 billion in taxes for 2022 and 2023
- Financial penalties, including a 10% annual interest rate and 26.75% CBN lending rate until full payment
- Compensation of $79.51 billion and ₦231 million for economic damages
Binance Executive’s Bribery Allegations and Government’s Response
The lawsuit follows recent accusations by Tigran Gambaryan, who, in a statement on X (formerly Twitter), alleged bribery and corruption involving NSA Nuhu Ribadu and members of the House of Representatives.
The Nigerian government dismissed Gambaryan’s claims as misinformation and defamatory statements.
Notably, in October 2024, Nigerian authorities dropped money laundering charges against Gambaryan, an executive at Binance Holdings Limited.