Nigeria Slaps Binance with $81.5B Lawsuit

Nigeria’s Federal Inland Revenue Service (FIRS) has filed a lawsuit against Binance, accusing the cryptocurrency exchange of tax evasion, foreign exchange violations, and destabilising the naira.

The case, lodged at the Federal High Court in Abuja, seeks $81.5 billion—$79.5 billion for alleged economic losses and $2 billion in unpaid taxes for 2022 and 2023—exceeding Binance’s valuation by approximately $20 billion (31.45%).

FIRS claims Binance operated in Nigeria without full regulatory approval and failed to comply with tax obligations, despite maintaining a “significant economic presence” in the country.

The agency is also demanding a 26.75% interest on the alleged back taxes.

Nigerian authorities further allege that Binance’s activities contributed to the naira’s devaluation in foreign exchange markets.

This lawsuit follows the detention of Binance executives Tigran Gambaryan and Nadeem Anjarwalla on charges of tax fraud and money laundering, though FIRS later dropped the tax-related charges against them.

Binance Faces Intense Legal Showdown with Nigeria

Nigeria’s lawsuit against Binance underscores stringent regulations imposed on foreign crypto service providers.

The case follows a series of regulatory actions against the exchange, including the unexpected detention of executives Gambaryan and Anjarwalla in February 2024 during what was meant to be a routine meeting with state regulators.

In response, Binance halted all naira trading in March 2024 after officials accused traders on its platform of destabilising the currency.

Gambaryan’s detention drew international attention, particularly after reports emerged that he was suffering from chronic health conditions and was allegedly denied proper medical care.

In July 2024, US Representative Rich McCormick introduced a resolution classifying Gambaryan’s detention as a hostage situation, demanding his release.

Diplomatic pressure intensified in September 2024, with US Ambassador to Nigeria Richard Mills urging the government to free him.

Under mounting scrutiny, Nigeria’s Economic and Financial Crimes Commission dropped money laundering charges against Gambaryan in October 2024, leading to his release on 23 October after nearly seven months in custody.

Meanwhile, Binance still faces four counts of tax evasion and civil penalty money laundering charges, which it denies.

The outcome of this case could shape Nigeria’s approach to regulating digital assets and influence the broader crypto landscape in the country.

Binance Goes Radio Silent Against Lawsuit

Binance has repeatedly expressed its willingness to cooperate with Nigerian authorities in assessing potential tax liabilities.

However, the exchange has yet to respond to the lawsuit filed against it.

The community was quick to back the exchange by admonishing the Nigerian government, calling them clowns.

In an affidavit, Jimada Mohammed Yusuf, a member of the Special Investigations Team under the National Security Advisor’s office, accused Binance and its executives of contributing to Nigeria’s economic losses.

He stated that the FIRS had evaluated Binance’s tax obligations for 2022 and 2023 and issued a demand notice—one the company allegedly ignored, leading to legal action.

The lawsuit also claims Binance operated covertly in Nigeria despite its substantial economic footprint.

Additional allegations include violations of Nigeria’s Companies Income Tax Act, the Federal Inland Revenue Service (Establishment) Act of 2007, the Central Bank of Nigeria’s Regulatory Framework for Mobile Money Services, and the Companies Income Tax Significant Economic Presence Order.

Will Legal Woes Continue Mounting for Binance Without Respite?

Nigeria’s lawsuit against Binance marks one of the most aggressive regulatory crackdowns on a crypto exchange.

If the government prevails, Binance could face billions in fines and tighter restrictions.

The $81.5 billion claim dwarfs the $4.3 billion settlement Binance paid to the US Department of Justice for banking violations in December 2023.

As the case unfolds, uncertainty looms over Nigeria’s crypto market, leaving traders and investors questioning the future of digital assets in the country.

With mounting legal battles, can Binance withstand the pressure, or is the exchange on the brink of being overwhelmed?