The Federal Inland Revenue Service (FIRS) of Nigeria has filed suit against Binance, a leading cryptocurrency exchange, concerning alleged economic losses and tax evasion.
The Nigerian government claims $79.5 billion for economic loss and $2 billion for income tax evasion in 2022 and 2023 for a total of $81.5 billion, a claim that is about $20 billion (31.45%) over Binance’s valuation.
FIRS is accusing Binance of operating in Nigeria without full approval and failing to comply with the country’s tax laws. In addition, the agency argues that the economic damage and tax evasion of Binance’s business activities in the country prompted legal action.
Binance is silent on the lawsuit against them
Binance has more than once expressed its readiness to work with the Nigerian authorities in determining any tax liabilities. However, they have not responded to a lawsuit brought against them.
In an affidavit, Jimada Mohammed Yusuf, a member of the Special Investigations Team from the office of the National Security Advisor, said that Binance and its executive are responsible for the economic losses the country suffered.
He stated that FIRS had done its assessment of the exchange’s income tax liabilities for 2022 and 2023 and issued them a demand notice. Yet, the company did not heed the notice, prompting the agency to file a claim.
The complaint also accuses Binance of secretly working in the country despite its large economic footprint. Other violations include breaches of Nigeria’s Companies Income Tax Act, the Federal Inland Revenue Service (Establishment) Act 2007, the CBN Regulatory Framework for Mobile Money Services, and the Companies Income Tax Significant Economic Presence Order.
Binance has experienced several regulatory hurdles in Nigeria recently
The regulations cited in the Binance lawsuit outline several conditions to which foreign companies that provide crypto services are subject to in the country.
The suit follows several regulatory lines against the exchange in Nigeria. Recently, Nigerian authorities arrested two Binance top leaders during the crackdown on the crypto industry.
The leading exchange is also being charged with four counts of tax evasion in addition to civil penalty money laundering by Nigeria’s anti-corruption agency, which the company denies.
The court case will have implications for the activities of crypto exchanges in Nigeria and could influence how Nigeria regulates future digital asset developments.
Elsewhere, there is a 60-day relief in a US SEC case filed against Binance in the State of Washington. A Federal Judge issued an order putting the civil lawsuit against the exchange on hold for 60 days.
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