The Federal High Court of Nigeria has discharged Tigran Gambaryan and Nadeem Anjarwalla from the tax evasion case filed by the Federal Inland Revenue Service (FIRS) against the cryptocurrency exchange platform Binance. This decision came after Binance appointed Ayodele Omotilewa as its Nigerian representative, leading the FIRS to file new charges with Binance as the sole defendant.
Background and Case Details
The FIRS initially filed charges against Binance and its executives, Tigran Gambaryan and Nadeem Anjarwalla, on March 22, 2024, alleging tax evasion. The allegations included failing to collect and remit various taxes, such as Value Added Tax (VAT) and Company Income Tax (CIT), from its Nigerian operations. On May 17, 2024, the charges were amended to reflect additional details about these alleged failures.
During the court session on June 5, 2024, Justice Emeka Nwite discharged Gambaryan, a 39-year-old American, and Anjarwalla, who had previously fled, following the filing of a new charge by the FIRS. This amendment came after Binance informed the court of Omotilewa’s appointment as their Nigerian representative.
New Charges and Court Proceedings
The fresh charges, dated June 13, 2024, list Binance as the sole defendant. The company is accused of aiding its subscribers in evading taxes, specifically failing to deduct the necessary VAT from transactions conducted on its platform. The FIRS is also questioning whether Omotilewa should physically stand in the dock to enter a plea on behalf of Binance.
Binance’s legal counsel, Tonye Krukrubo SAN, argued against this requirement, suggesting that the representative need not be present in the dock and could instead provide a written statement. Justice Nwite has requested written submissions from both parties to decide on this matter.
Broader Context and Future Implications
This case highlights the Nigerian government’s ongoing scrutiny of cryptocurrency operations within the country. In response to economic challenges and significant devaluation of the naira, authorities have intensified their oversight of crypto trading platforms, accusing them of influencing foreign exchange rates.
The Economic and Financial Crimes Commission (EFCC) has also brought separate charges against Binance and its executives for alleged money laundering and foreign exchange violations. This includes the detention of senior Binance executives, with Gambaryan still in custody and Anjarwalla having fled.
In a broader move to stabilize the economy, President Bola Ahmed Tinubu plans to enforce an executive order mandating that taxes and levies be paid in naira and prioritizing the procurement of Nigerian-made goods and services. This policy aims to reduce pressure on the naira and improve forex liquidity.
Moving Forward
The next court hearing is scheduled for July 12, 2024, when the plea of Binance will be entered. The outcome of this case could set a precedent for how digital asset companies operate within Nigeria, especially concerning tax compliance and regulatory oversight.
While Binance continues to navigate these legal challenges, the company’s spokesperson, Ivy Shirinda, expressed disappointment over Gambaryan’s detention, emphasizing his commitment to fighting financial crime and calling the charges against him baseless. The situation remains fluid as discussions between Binance and Nigerian government officials continue.
