The federal government has filed a suit against cryptocurrency exchange company, Binance Holdings Limited, before a Federal High Court in Abuja, asking the court to compel the company to pay $79.51 billion and N231 million for alleged economic losses caused by its operations in Nigeria.
The plaintiff, the Federal Inland Revenue Service, in a charge marked FHC/ABJ/CS/1444/2024, against Binance, is also seeking payment of $2.001 billion in income taxes for 2022 and 2023.
In the suit, Binance and two of its executives, Tigran Gambaryan and Nadeem Anjarwalla, are accused of contravening Nigerian laws, including failing to register with FIRS for tax compliance and allegedly causing economic losses to the country during the review period.
This lawsuit is the third before the court against Binance.
The FIRS and the Economic and Financial Crimes Commission (EFCC) had in a related suit before Justice Emeka Nwite of the Federal High Court in Abuja, charged the company with tax evasion, money laundering, and foreign exchange violations.
The monetary claims in the lawsuit include a 10 per cent penalty for non-payment of taxes for 2022 and 2023, a 26.75 per cent 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 accused Binance of concealing 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 (SEP) 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 N25 million annually from digital services in Nigeria.
An affidavit, deposed to by a member of the Special Investigation Team from the Office of the National Security Adviser, Jimada Yusuf, revealed that Binance had been operating in Nigeria for over six years without registration.
According to Yusuf, during a 2024 meeting with the Securities and Exchange Commission (SEC), Binance executives (Anjarwalla and Gambaryan) admitted to having 386,256 active Nigerian users on its platform, with a trading volume of $21.6 billion and net revenue of $35.4 million for 2023.
The affidavit also accused Binance of operating without required licenses and permits, non-compliance with the Money Laundering Act, offering unauthorised financial services, and providing currency speculation services.
The NSA said that Binance unlawfully listed and traded the Nigerian Naira on its platform, even after claiming it had delisted the currency following investigations.
The affidavit also 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.
The FIRS, represented by lead counsel Kanu Agabi, was present in court on February 11, 2025, when the suit was called for hearing before Justice Inyang Ekwo; however, Binance’s legal team was absent.
Agabi informed the court that attempts to serve Binance directly had been unsuccessful, and he had filed a motion for substituted service on the company.
Justice Ekwo granted the motion and directed that substituted service be carried out within seven days. The case was adjourned to March 3, 2025.
FIRS is seeking the reliefs in the suit, including 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 $2.001 billion 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 $79.51 billion and ₦231 million for economic losses.”
