The Nigerian federal government has filed a lawsuit seeking $81 billion in compensation from Binance Holdings Limited, accusing the cryptocurrency exchange of causing significant economic losses through its operations in the country.
Binance faces accusations of violating Nigerian regulations related to tax compliance, mobile money licensing, and its significant economic presence in the country. It is also accused of tax evasion, money laundering, and offering unauthorized financial services.
The lawsuit, filed before the Federal High Court in Abuja on February 11, claims that Binance operated in secrecy despite its substantial presence in Nigeria.
It alleges that the company violated multiple financial and tax regulations, including the Companies Income Tax Act, the Federal Inland Revenue Service (FIRS) Act 2007, the Central Bank of Nigeria’s Mobile Money Services Framework, and the Significant Economic Presence (SEP) Order.
The SEP Order mandates that foreign companies earning at least N25 million annually from digital services in Nigeria must register.
An affidavit by Jimada Yusuf, a member of the Office of the National Security Adviser’s (ONSA) investigation team, stated that Binance had been operating in Nigeria for over six years without proper registration.
Yusuf noted that Binance executives, Tigran Gambaryan and Nadeem Anjarwalla, admitted this in a 2024 meeting with the Securities and Exchange Commission (SEC).
Binance reportedly acknowledged in a letter dated February 20, 2024, that it had 386,256 active Nigerian users, a trading volume of $21.6 billion, and a net revenue of $35.4 million for 2023.
The Federal Inland Revenue Service (FIRS), represented by Senior Advocate of Nigeria (SAN) Kanu Agabi, argues that Binance is liable for corporate income tax in Nigeria and must file tax returns for 2022 and 2023.
The agency is seeking a court order for Binance to pay $2.001 billion in unpaid taxes for those years, along with a 10% penalty per year on any overdue taxes.
In addition, the FIRS is requesting that Binance pay an annual interest rate of 26.75% based on the Central Bank of Nigeria’s lending rate, applicable from January 1, 2023, until the full payment is made.
The FIRS is also demanding that Binance be held responsible for economic losses totalling $79.51 billion and N231 million.
During a recent court hearing, Judge Inyang Ekwo approved a motion for substituted service, allowing legal documents to be served to Binance through alternative means. The case is scheduled for a further hearing on March 3.
