The Federal Government has initiated legal proceedings against Binance, a well-known cryptocurrency exchange platform, in a notable step aimed at maintaining fiscal responsibility and safeguarding the economic integrity of the country.
The Federal Inland Revenue Service (FIRS) disclosed on Monday that charges have been formally filed against Binance at the Federal High Court in Abuja.
The lawsuit, identified as suit number FHC/ABJ/CR/115/2024, accuses Binance of four counts of tax evasion.
Accompanying the cryptocurrency company as the second and third defendants in the suit are Tigran Gambaryan and Nadeem Anjarwalla, both senior executives of Binance, who are currently in custody of the Economic and Financial Crimes Commission (EFCC).
The charges against Binance include allegations of non-payment of Value-Added Tax (VAT) and Company Income Tax, failure to file tax returns, and involvement in aiding customers to evade taxes through its platform.
Additionally, the Federal Government accuses Binance of failing to register with FIRS for tax purposes and violating existing tax regulations in 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 outlined by Section 40 of the FIRS Establishment Act 2007, which mandates penalties and potential imprisonment for defaulting entities.
The charges outline specific instances where Binance allegedly violated tax laws, such as the failure to issue invoices for VAT purposes, thereby impeding the determination and payment of taxes by subscribers.
“Any company that conducts business exceeding N25 million annually is deemed, by the Finance Act, to be present in Nigeria,” the FIRS noted in a statement.
“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 reiterates its unwavering dedication to enforcing tax regulations and addressing financial irregularities within the cryptocurrency industry.
By statute, the FIRS is authorized to evaluate, collect, and manage revenue accruing to the Federation and oversee pertinent tax statutes.
Previously, Binance admitted culpability for breaching anti-money laundering regulations in the United States towards the end of 2023, entering into a plea bargain arrangement that mandated the company to pay a substantial fine of $4.3 billion.