Binance, one of the world’s largest cryptocurrency exchanges, has confirmed its awareness of a $81.5 billion lawsuit filed by the Nigerian government, promising to share updates as the situation develops. The lawsuit, initiated by the Federal Inland Revenue Service (FIRS), alleges tax violations and economic damages caused by the platform’s operations in Nigeria.
In response to an inquiry from *The PUNCH*, a Binance spokesperson stated, “Noting that we have seen your email. We will reach out to you should there be any updates on this.” The case, filed at the Federal High Court in Abuja under case number FHC/ABJ/CS/1444/2024, names Binance and two of its executives, Tigran Gambaryan and Nadeem Anjarwalla, as defendants.
The Nigerian government is seeking $79.5 billion in damages for alleged economic losses and an additional $2 billion in unpaid taxes. The FIRS is also demanding penalties, including a 10% annual interest rate on outstanding taxes and a 26.75% charge based on the Central Bank of Nigeria’s lending rate until the full amount is settled.
Allegations Against Binance
The lawsuit accuses Binance of failing to register for tax compliance, violating Nigerian tax laws, and contributing to economic distortions. This legal action is the latest in a series of regulatory challenges faced by the cryptocurrency exchange in Nigeria. Earlier in March 2024, Binance ceased naira transactions amid increasing scrutiny from Nigerian authorities.
Last year, Central Bank of Nigeria (CBN) Governor Olayemi Cardoso claimed that Binance facilitated $26 billion in transactions from unidentified sources. Binance has denied these allegations, with Tigran Gambaryan, the company’s Head of Financial Crime Compliance, describing the claims as “complete nonsense.” In a post on X (formerly Twitter), Gambaryan clarified that the $26 billion figure represented cumulative trade data for Nigerian users on the platform, which had been shared with regulators upon request.
Ongoing Legal Battle
The case is currently under judicial review, with Binance yet to issue a detailed response to the allegations. The lawsuit highlights the growing tension between cryptocurrency platforms and regulatory authorities in Nigeria, as the government seeks to tighten oversight of digital asset transactions.
The Nigerian government has intensified its efforts to regulate the cryptocurrency sector, citing concerns over tax evasion, money laundering, and economic instability. The FIRS’s lawsuit against Binance underscores its commitment to enforcing tax compliance and holding foreign entities accountable for their operations within the country.
Implications for Binance and the Crypto Industry
The outcome of this lawsuit could have significant implications for Binance and the broader cryptocurrency industry in Nigeria. If the court rules in favor of the Nigerian government, it may set a precedent for stricter regulations and higher penalties for non-compliant crypto platforms operating in the country.
For now, Binance has pledged to monitor the situation and provide updates as necessary. The case continues to draw attention from stakeholders in the cryptocurrency space, with many awaiting further developments.
As the legal battle unfolds, the Nigerian government’s actions reflect its determination to address economic challenges and ensure compliance within the rapidly evolving digital asset sector. Binance, meanwhile, remains under pressure to navigate these regulatory hurdles while maintaining its operations in one of Africa’s largest cryptocurrency markets.
