Federal Government Slams Binance With Fresh $81.5bn Lawsuit

The Federal Government of Nigeria has filed a lawsuit against cryptocurrency platform Binance, demanding a total of $81.5 billion in penalties for alleged economic losses and tax violations.

The Federal Inland Revenue Service (FIRS) is seeking N79.51 billion and N231 million as compensation for economic damages, along with $2.001 billion in unpaid income taxes for the years 2022 and 2023. The lawsuit, marked FHC/ABJ/CS/1444/2024, accuses Binance and two of its executives, Tigran Gambaryan and Nadeem Anjarwalla, of failing to comply with Nigerian tax laws, including neglecting to register with FIRS.

This lawsuit marks the third legal action against Binance currently before the Federal High Court in Abuja. The Economic and Financial Crimes Commission (EFCC) has also charged the company with tax evasion, money laundering, and foreign exchange violations.

According to the lawsuit, Binance concealed its business operations in Nigeria despite maintaining a significant economic presence in the country. It allegedly breached several Nigerian laws, including the Companies Income Tax Act, the FIRS (Establishment) Act 2007, and the CBN Regulatory Framework for Mobile Money Services. The Significant Economic Presence (SEP) Order, which applies to foreign companies earning at least N25 million annually from digital services in Nigeria, was also cited in the charges.

An affidavit submitted by Jimada Yusuf, a member of the Special Investigation Team from the Office of the National Security Adviser (NSA), revealed that Binance has operated in Nigeria for over six years without proper registration. Yusuf stated that in a 2024 meeting with the Securities and Exchange Commission (SEC), Binance executives admitted to having 386,256 active Nigerian users, a trading volume of $21.6 billion, and net revenue of $35.4 million for 2023.

The affidavit further alleges that Binance operated without necessary licenses and permits, violated the Money Laundering Act, provided unauthorized financial services, and engaged in currency speculation. Despite an order from the Federal High Court, Binance allegedly failed to provide business records spanning six years.

During a hearing on February 11, 2025, before Justice Inyang Ekwo, the legal team representing FIRS, led by Senior Advocate of Nigeria Kanu Agabi, informed the court that attempts to serve Binance directly had been unsuccessful. The court granted a motion for substituted service, with a deadline of seven days for compliance. The next hearing is scheduled for March 3, 2025.

The FIRS is seeking several reliefs, including:

• A declaration that Binance is liable to pay corporate income tax for operating in Nigeria.
• A mandate requiring Binance and its executives to file income tax returns for 2022 and 2023.
• An order compelling Binance to pay $2.001 billion in taxes.
• Penalties, including a 10% annual interest charge and a 26.75% interest rate, until the tax obligations are met.
• Compensation of $79.51 billion and N231 million for economic losses.

The lawsuit follows allegations made by Binance executive Tigran Gambaryan, who recently accused Nigerian authorities of corruption. In response, the Federal Government dismissed these claims as misinformation and defamatory.

This case adds to Binance’s growing legal troubles in Nigeria as authorities continue to crack down on financial crimes and tax evasion within the cryptocurrency sector.