In a landmark move aimed at enforcing fiscal prudence and protecting the nation’s economic integrity, the Federal Government has launched legal action against Binance, a well-known cryptocurrency exchange platform.
The Federal Inland Revenue Service (FIRS) announced the allegations on Monday, which were formally submitted before the Federal High Court in Abuja.
The complaint, designated as FHC/ABJ/CR/115/2024, accuses Binance of four counts of tax evasion.
Tigran Gambaryan and Nadeem Anjarwalla, both senior officials at Binance who are currently being taken in custody by the Economic and Financial Crimes Commission (EFCC), are the second and third defendants in the claim.
Allegations against Binance include nonpayment of Value-Added Tax (VAT), Company Income Tax, failure to file tax returns, and involvement in assisting clients to cheat taxes through its platform.
Furthermore, the Federal Government accuses Binance of failing to register with FIRS for tax purposes and violating current tax legislation in the country.
One of the claims in the complaint related to Binance’s apparent inability to collect and return various categories of taxes to the federation, as stated by Section 40 of the FIRS Establishment Act 2007 as modified.
This clause clearly covers non-deduction and non-remittance of taxes, imposing penalties and potential jail on defaulting entities.
The allegations detail particular instances in which Binance allegedly broke tax rules, such as failing to deliver VAT invoices, which hampered subscribers’ ability to calculate and pay taxes.
“Any company that conducts business exceeding N25 million annually is deemed, by the Finance Act, to be present in Nigeria,” the Financial Institutions Regulatory Authority (FIRS) said in a
“According to this rule, Binance belongs in that category. As a result, it is required to pay taxes such as Corporate Income Tax (CIT) as well as collect and remit Value Added Tax. However, Binance failed to meet these conditions, breaking Nigerian legislation and perhaps facing an investigation and legal action for this infraction.”
The FIRS is mandated by law to assess, collect, and account for money generated by the Federation, as well as to administer related tax legislation.
Binance previously pleaded guilty to breaking anti-money laundering rules in the United States in late 2023, reaching a plea bargain agreement and paying a $4.3 billion fine.