By Ohuakanwa Chibuzo
In a significant development in the regulation of cryptocurrency activities in Nigeria, the Federal Inland Revenue Service (FIRS) has taken legal action against Binance, a leading cryptocurrency exchange platform. The FIRS filed criminal charges against Binance at the Federal High Court in Abuja, under case number FHC/ABJ/CR/115/2024, alleging four separate tax offenses.
The charges leveled against Binance include non-payment of Value Added Tax (VAT), failure to file tax returns, non-payment of Company Income Tax (CIT), and “aiding customer tax evasion.” The FIRS contends that Binance’s platform facilitated customer tax evasion, marking a critical accusation against the cryptocurrency exchange.
In an official statement released on Monday in Abuja, the FIRS asserted that the lawsuit extends beyond mere registration issues, emphasizing Binance’s failure to comply with existing Nigerian tax regulations. The Federal Government accused Binance of failing to register with FIRS for tax purposes and contravening established tax regulations within the country.
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The lawsuit specifically highlights Binance’s alleged failure to collect and remit various categories of taxes to the federation, as mandated by Section 40 of the FIRS Establishment Act 2007, with potential penalties and imprisonment for defaulting entities.
Binance executives, Tigran Gambaryan and Nadeem Anjarwalla, find themselves named as the second and third defendants in the lawsuit. Both executives are currently in the custody of the Economic and Financial Crimes Commission (EFCC), marking a significant escalation in the legal proceedings against the cryptocurrency exchange.
The FIRS reiterated its commitment to enforcing tax regulations and combatting financial misconduct within the cryptocurrency sector. Empowered by law to assess, collect, and account for federal revenue, including administering relevant tax laws, the FIRS aims to ensure compliance across the burgeoning cryptocurrency landscape.
This legal action follows Binance’s admission of guilt to violating anti-money laundering laws in the United States in late 2023, which resulted in a substantial $4.3 billion penalty through a plea bargain. The ongoing lawsuit against Binance underscores the authorities’ determination to regulate cryptocurrency activities rigorously.
The outcome of this case will be closely monitored by industry stakeholders and could establish a precedent for future regulatory measures concerning the cryptocurrency sector in Nigeria, shaping its trajectory within the country’s financial landscape.
