In a significant move aimed at upholding fiscal responsibility and safeguarding the economic integrity of the nation, the Federal Government has initiated legal proceedings against Binance, a prominent cryptocurrency exchange platform. The charges, formally filed at the Federal High Court in Abuja, were announced by the Federal Inland Revenue Service (FIRS) on Monday.
This legal action, designated as suit number FHC/ABJ/CR/115/2024, implicates Binance with a four-count accusation of tax evasion. Joining the crypto company as second and third defendants in the suit are Tigran Gambaryan and Nadeem Anjarwalla, both senior executives of Binance, currently in custody by the Economic and Financial Crimes Commission (EFCC).
The charges leveled against Binance include allegations of non-payment of Value-Added Tax (VAT), Company Income Tax, failure to file tax returns, and complicity in aiding customers to evade taxes through its platform. Moreover, the Federal Government accuses Binance of failing to register with FIRS for tax purposes and violating existing tax regulations within the country.
One of the counts in the lawsuit pertains to Binance’s alleged failure to collect and remit various categories of taxes to the federation, as stipulated by Section 40 of the FIRS Establishment Act 2007 as amended. This section explicitly addresses the non-deduction and non-remittance of taxes, prescribing penalties and potential imprisonment for defaulting entities.
The charges delineate specific instances where Binance purportedly contravened tax laws, such as the failure to issue invoices for VAT purposes, hindering the determination and payment of taxes by subscribers.
In a statement, the FIRS noted, “Any company that conducts business exceeding N25 million annually is deemed, by the Finance Act, to be present in Nigeria. According to this rule, Binance falls into that category. So, it is obligated to pay taxes like Company Income Tax (CIT) and also collect and remit Value Added Tax (VAT). However, Binance did not adhere to these requirements, thus violating Nigerian laws and potentially facing investigation and legal action for this infraction.”
The Federal Government reaffirms its commitment to ensuring compliance with tax regulations and combating financial impropriety within the cryptocurrency sector. By law, FIRS is empowered to assess, collect, and account for revenue accruing to the Federation and administer relevant tax laws.
It's noteworthy that Binance previously admitted to violating anti-money laundering laws in the United States in late 2023, reaching a plea bargain agreement that resulted in the company paying a hefty fine of $4.3 billion.
