The Nigerian government, through the Federal Inland Revenue Service (FIRS), has filed a lawsuit against Binance Holdings Limited at the Federal High Court in Abuja, demanding $79,514,055,594.40 and N231 million for alleged economic losses caused by its operations in Nigeria. Additionally, the government is seeking $2,001,000,000 in unpaid income tax for 2022 and 2023.

An online newspaper, Nairametrics, reported that that the claims include a 10% penalty for non-payment of income tax for 2022 and 2023, a 26.75% annual interest—equivalent to the prevailing Central Bank of Nigeria (CBN) lending rate—from 1 January 2023 and 1 January 2024, respectively, alongside other charges.

Binance, a global cryptocurrency exchange, and two of its executives, Tigran Gambaryan and Nadeem Anjarwalla, are accused of violating Nigerian tax laws by failing to register with the FIRS for tax compliance. The lawsuit also alleges that the platform caused significant economic losses to the country.

The government claims Binance deliberately concealed its business activities despite having a “significant economic presence” in Nigeria. The alleged violations include breaches of the Companies Income Tax (CIT) 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, issued by the former Minister of Finance, Budget, and National Planning, Mrs Zainab Shamsuna Ahmed, and gazetted in May 2020, mandates that foreign companies with an annual turnover of at least N25 million from digital activities in Nigeria must pay taxes.

This lawsuit marks the third pending litigation by federal agencies against Binance’s cryptocurrency operations in Nigeria, which remain popular among Nigerians.

An affidavit deposed by Jimada Mohammed Yusuf, a member of the Special Investigation Team from the Office of the National Security Adviser (NSA), revealed that Binance had been operating in Nigeria for over six years without registration. Yusuf stated that this was allegedly confirmed by Gambaryan and Anjarwalla during a 2024 meeting with the Securities and Exchange Commission (SEC). Furthermore, a letter dated 20 February 2024 from Binance reportedly acknowledged that the platform had 386,256 active Nigerian users, a trading volume of $21.6 billion, and net revenue of $35.4 million in 2023.

The affidavit accuses Binance and its executives of multiple infractions, including offering financial services without the necessary licences, operating without required permits, non-compliance with the Money Laundering Act, and providing currency speculation services without authorisation. It also alleges that Binance engaged in Virtual Asset Service Provider (VASP) activities in Nigeria without regulatory approval.

Additionally, Binance executives allegedly admitted that the platform had unlawfully listed and traded the Nigerian Naira until it claimed to have delisted the currency following an investigation by the NSA. However, further NSA investigations reportedly found this claim to be false, as the Naira remained accessible on the platform.

The FIRS, through its lead counsel, Kanu Agabi (SAN), is seeking several reliefs. It seeks a declaration that Binance and its executives are liable to pay annual corporate income tax in Nigeria due to their significant economic presence. It also seeks a declaration that Binance must file income tax returns for 2022 and 2023 and that Binance is bound by FIRS’s income tax assessment due to its failure to file self-assessment returns within the statutory period.

The lawsuit demands an order compelling Binance to pay $2,001,000,000 in unpaid income taxes for 2022 and 2023. It also requests an order imposing a 10% annual penalty on unpaid taxes for 2022 and 2023 and another mandating Binance to pay a 26.75% annual interest on unpaid taxes from 1 January 2023 and 1 January 2024, until full payment is made. Additionally, the FIRS is seeking an order requiring Binance to pay $79,514,055,594.40 and N231 million in compensation for economic losses incurred by Nigeria.

The lawsuit, marked FHC/ABJ/CS/1444/2024, was brought before Justice Inyang Ekwo of the Federal High Court in Abuja on 11 February 2025. Binance’s legal representatives were absent from the proceedings. Agabi informed the court that attempts to serve Binance directly had been unsuccessful, leading him to file a motion for substituted service on 7 February 2025. Justice Ekwo granted the request, ordering substituted service within seven days. The case was adjourned to 3 March 2025.

Additionally, Binance faces separate charges of tax evasion, money laundering, and foreign exchange violations before Justice Emeka Nwite in a case filed by the FIRS and EFCC. Binance has denied all charges. As legal battles against Binance unfold, global scrutiny remains high, with several other countries, including the United States, imposing fines on the exchange for regulatory breaches.