The federal government is seeking $81 billion in compensation from Binance Holdings Limited over alleged economic losses linked to the company's operations in Nigeria.
According to Nairametrics, the government claimed that Binance deliberately operated in secrecy despite maintaining a significant economic presence in the country.
The lawsuit, marked FHC/ABJ/CS/1444/2024, was filed before Justice Inyang Ekwo of the Federal High Court in Abuja on February 11. The federal government alleged that Binance violated multiple financial and tax regulations, including the Companies Income Tax Act, the Federal Inland Revenue Service (Establishment) Act 2007, the Central Bank of Nigeria’s Regulatory Framework for Mobile Money Services, and the Significant Economic Presence (SEP) Order, which applies to foreign companies earning at least N25 million annually from digital services in Nigeria.
In an affidavit deposed by Jimada Yusuf, a member of the special investigation team in the Office of the National Security Adviser (ONSA), Binance is said to have been operating in Nigeria for over six years without registration. Yusuf stated that Binance executives Tigran Gambaryan and Nadeem Anjarwalla admitted this fact during a 2024 meeting with the Securities and Exchange Commission (SEC). He further claimed that in a letter dated February 20, 2024, Binance acknowledged having 386,256 active Nigerian users, a trading volume of $21.6 billion, and a net revenue of $35.4 million for the 2023 calendar year.
The Federal Inland Revenue Service (FIRS), represented by lead counsel Kanu Agabi, a Senior Advocate of Nigeria (SAN), argued that Binance is liable to pay corporate income tax in Nigeria and must file income tax returns for 2022 and 2023. The agency is seeking a court order compelling Binance to pay $2,001,000,000 in outstanding income taxes for the two years, along with a 10 percent penalty per year on unpaid taxes.
The FIRS also wants Binance to pay an annual interest rate of 26.75 percent, based on the Central Bank of Nigeria’s lending rate, from January 1, 2023, and January 1, 2024, respectively, until full payment is made. Additionally, the agency is demanding that Binance be held responsible for economic losses amounting to $79.51 billion and N231 million.
At the latest court proceedings, Justice Inyang Ekwo granted a motion for substituted service on Binance, allowing legal documents to be served through alternative means. The case has been adjourned to March 3.