Thursday, February 20, 2025 -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.
0 Comments