The Federal Inland Revenue Service (FIRS) has filed a lawsuit against cryptocurrency exchange Binance, seeking $79.5 billion for alleged economic losses and an additional $2 billion in back taxes for 2022 and 2023. The amount totalling $81.5 billion is almost $20 billion (31.45%) over Binance’s valuation, according to calculations.
Per Reuters, the lawsuit, submitted to the Federal High Court in Abuja, accuses Binance of operating without proper registration and failing to comply with Nigerian tax laws. FIRS claims that Binance’s activities led to significant economic damages and tax evasion, prompting this legal action.
Binance has previously stated its intention to cooperate with Nigerian authorities to resolve any tax liabilities but has not yet commented on the current lawsuit.
In the lawsuit, FIRS outlines that Binance failed to register with the agency for tax compliance, resulting in substantial economic losses for Nigeria. The Central Bank of Nigeria (CBN) conducted an assessment in May 2024, estimating that Binance’s operations caused approximately $79.5 billion in economic damages over six months.
Jimada Mohammed Yusuf, a member of the Special Investigation Team from the Office of the National Security Adviser, stated in an affidavit that Binance and its executives are liable for the economic losses incurred. He noted that FIRS had assessed Binance’s income tax liabilities for the years in question and issued a demand notice, which the company allegedly ignored, leading to the current legal proceedings.
The lawsuit also alleges that Binance operated covertly within Nigeria despite having a significant economic presence. The cited violations include breaches of Nigeria’s Companies Income Tax Act, the Federal Inland Revenue Service (Establishment) Act 2007, the CBN Regulatory Framework for Mobile Money Services, and the Companies Income Tax Significant Economic Presence Order.
These regulations outline the conditions under which foreign and non-resident companies providing digital services are subject to taxation in Nigeria.
This legal action follows a series of regulatory measures against Binance in Nigeria. In 2024, two Binance executives were detained by Nigerian authorities amid a crackdown on the cryptocurrency industry. The company is currently contesting four counts of tax evasion and is also facing separate money laundering charges from Nigeria’s anti-corruption agency, which it denies.
As the case progresses, it is expected to have significant implications for the operation of cryptocurrency platforms within Nigeria and may influence future regulatory approaches to digital assets in the country.
