Binance, a prominent entity in the global cryptocurrency exchange landscape, finds itself navigating intricate legal proceedings within Nigeria. A notable turn of events saw a Nigerian court grant a postponement in the high-profile tax evasion case leveled against the company. Consequently, the subsequent hearing has been deferred, signifying a continuation of the complex dispute between the exchange platform and the Nigerian authorities.
The adjournment to April 30th came at the request of Nigeria’s Federal Inland Revenue Service (FIRS). This extension provides the FIRS with the necessary time to construct a counter-argument to Binance’s most recent legal challenge. A key point of Binance’s defense, articulated by their legal counsel Chukuka Ikuazom, disputes the legitimacy of how legal notices were served. Ikuazom posits that utilizing email for service was inappropriate, given Binance’s official registration and base of operations in the Cayman Islands, asserting that FIRS failed to adhere to established legal protocols for serving documents internationally.
Allegations and Financial Claims by FIRS
The legal confrontation intensified earlier this year when FIRS initiated proceedings. The tax authority accuses Binance of owing a significant sum in back taxes, quantified at $2 billion. Moreover, FIRS is pursuing damages amounting to nearly $80 billion, claiming the exchange’s activities negatively impacted the stability of Nigeria’s national currency, the Naira. The agency contends that Binance maintained a “significant economic presence” within Nigeria, thus incurring liability for corporate taxes for the years 2022 and 2023. In addition to the alleged tax debt, FIRS seeks a 10% annual penalty on unpaid amounts, alongside interest charges approaching 27%.
Parallel Issues: Executive Detentions
These tax-related legal struggles ran concurrently with separate, grave legal matters concerning two Binance executives. At the start of 2024, Tigran Gambaryan and Nadeem Anjarwalla were detained in Nigeria under allegations of tax evasion and money laundering. Although the charges directed at Mr. Anjarwalla were withdrawn in June, he had previously escaped custody and is believed to have fled to Kenya; his current whereabouts are unknown. Mr. Gambaryan, conversely, remained in detention until October. During his confinement, there were reports raising concerns about his well-being, including mentions of pneumonia. He was eventually released and allowed to return to the United States.
Facing these escalating legal and operational difficulties, Binance made a significant change to its services in the country. In March 2024, the platform suspended all deposits and withdrawals denominated in the Nigerian Naira. This action effectively represented Binance’s withdrawal from the Nigerian market amidst the ongoing legal entanglements.
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