Abuja, Nigeria – The Federal Inland Revenue Service (FIRS) has filed a lawsuit at the Federal High Court in Abuja, seeking to compel Binance Holdings Limited to pay a staggering $79.5 billion for alleged economic losses caused by its operations in Nigeria. The suit also demands the cryptocurrency exchange platform pay $2 billion in outstanding income tax for 2022 and 2023, along with additional penalties and interest.
Allegations Against Binance
According to court documents obtained by REPORT AFRIQUE, the Nigerian government accuses Binance of operating without proper registration and failing to comply with tax regulations. The suit, marked FHC/ABJ/CS/1444/2024, also names two Binance executives, Tigran Gambaryan and Nadeem Anjarwalla, as co-defendants.
The government alleges that the company deliberately concealed its operations despite having a “significant economic presence” in Nigeria. Violations cited in the case include breaches of:
Companies Income Tax (CIT) Act
- Federal Inland Revenue Service (Establishment) Act 2007
- Central Bank of Nigeria (CBN) Regulatory Framework for Mobile Money Services
- CIT Significant Economic Presence (SEP) Order
- Under the SEP Order, foreign digital service providers earning at least N25 million annually in Nigeria are required to pay taxes. The order was introduced in May 2020 under former Minister of Finance Zainab Shamsuna Ahmed.
FG’s Findings on Binance’s Operations in Nigeria
In an affidavit deposed by Jimada Mohammed Yusuf, a member of the Special Investigation Team from the Office of the National Security Adviser (NSA), Binance has been operating in Nigeria for over six years without registration.
Key findings from the investigation include:
- Binance allegedly admitted, in a letter dated February 20, 2024, that it had 386,256 active users in Nigeria.
- In 2023 alone, the platform reportedly recorded a trading volume of $21.6 billion and a net revenue of $35.4 million.
- Binance provided financial services without necessary licenses, violated money laundering laws, and engaged in currency speculation without authorization.
- Binance failed to comply with multiple requests from the NSA and the Economic and Financial Crimes Commission (EFCC) to provide business records spanning six years.
Additionally, Nigerian authorities claim that the cryptocurrency company misled investigators by falsely stating it had delisted the Nigerian Naira from its platform, while evidence showed otherwise.
Economic Losses and Financial Liabilities
The Nigerian government estimates that Binance’s operations led to $7.95 trillion in economic losses over six months in early 2024. Based on this, the FIRS is demanding:
- $79.5 billion for economic damages
- N231 million for additional losses
- $2 billion in outstanding taxes for 2022 and 2023
- 10% annual penalty on unpaid taxes
- 26.75% interest per annum on outstanding taxes from January 2023 and January 2024 until full payment is made
Legal Proceedings and Next Steps
At a court hearing on February 11, 2025, Binance’s legal team was absent. FIRS’s lead counsel, Kanu Agabi (SAN), informed Justice Inyang Ekwo that attempts to serve Binance directly had been unsuccessful. As a result, the judge granted a motion for substituted service, allowing documents to be served through alternative means within seven days.
The case was adjourned to March 3, 2025.
Separately, Binance is also facing additional charges of tax evasion, money laundering, and foreign exchange violations in a different lawsuit before Justice Emeka Nwite, brought by the FIRS and the EFCC.
Nigeria is not the only country taking regulatory action against Binance. Authorities in the United States and other jurisdictions have also imposed fines and restrictions on the crypto exchange for alleged financial crimes and regulatory violations.
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