In a significant move aimed at maintaining fiscal discipline and protecting the economic stability of the nation, the Federal Government has initiated legal proceedings against Binance, a leading cryptocurrency exchange platform.
The charges, brought before the Federal High Court in Abuja, were disclosed on Monday by the Federal Inland Revenue Service (FIRS) through a statement issued by Dare Adekanmbi, the media aide to the FIRS chairman. The lawsuit, identified as FHC/ABJ/CR/115/2024, accuses Binance of four counts of tax evasion.
Accompanying the crypto firm as second and third defendants in the lawsuit are Tigran Gambaryan and Nadeem Anjarwalla, both senior executives of Binance. The allegations against Binance include failure to remit Value-Added Tax (VAT), Company Income Tax, failure to file tax returns, and involvement in facilitating customers’ tax evasion through its platform.
Furthermore, the Federal Government accuses Binance of neglecting to register with FIRS for tax purposes and violating existing tax regulations within the country.
One of the charges in the lawsuit pertains to Binance’s purported failure to collect and remit various taxes to the federation, as stipulated by Section 40 of the FIRS Establishment Act 2007 (as amended).
Section 40 of the Act explicitly addresses the consequences of non-deduction and non-remittance of taxes, outlining penalties and potential imprisonment for offending entities. The charges provide specific instances where Binance allegedly violated tax laws, such as the failure to issue invoices for VAT purposes, hindering the determination and payment of taxes by users.
“Any company engaging in transactions exceeding N25 million annually is considered by the Finance Act to be operating within Nigeria. According to this provision, Binance falls into this category. Consequently, it is obligated to pay taxes such as Company Income Tax (CIT) and collect and remit Value Added Tax (VAT). However, Binance failed to adhere to these regulations, thereby violating Nigerian laws and potentially facing investigation and legal action for this breach,” the statement reads.
“The federal government remains steadfast in its commitment to ensuring compliance with tax regulations and combating financial malpractice within the cryptocurrency sector,” the statement continues.
It’s worth noting that Binance pleaded guilty to violating anti-money laundering laws in the United States in late 2023, resulting in a plea bargain that imposed a $4.3 billion penalty on the company.
