The Federal Inland Revenue Service (FIRS) has filed criminal charges against Binance, a leading cryptocurrency exchange platform.
The lawsuit, filed at the Federal High Court in Abuja under case number FHC/ABJ/CR/115/2024, accuses Binance of four separate tax offenses.
The charges include non-payment of Value Added Tax (VAT); failure to file tax returns; non-payment of Company Income Tax (CIT) evasion and “aiding customer tax evasion”.
FIRS alleged that Binance’s platform facilitated customer tax evasion.
In a statement on Monday in Abuja, FIRS noted that filing the suit went beyond the issue of registration, asserting that Binance failed to adhere to existing Nigerian tax regulations.
According to FIRS: “The Federal Government also accused Binance of failure to register with FIRS for tax purposes and contravening existing tax regulations within 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 stipulated by Section 40 of the FIRS Establishment Act 2007 as amended.
“Section 40 of the Act explicitly addresses the non-deduction and non-remittance of taxes, prescribing penalties and potential imprisonment for defaulting entities”.
Specifically, FIRS accused Binance of neglecting to register for tax purposes.
The lawsuit claimed that Binance did not register with the FIRS as required by law while another charge alleged that Binance’s operations violated established tax regulations in Nigeria.
FIRS provided details to support its claims.
The lawsuit named Tigran Gambaryan and Nadeem Anjarwalla, senior Binance executives in the custody of the Economic and Financial Crimes Commission (EFCC) as the second and third defendants.
FIRS emphasised its commitment to enforcing tax regulations and tackling financial misconduct within the cryptocurrency sector.
The agency is empowered by law to assess, collect, and account for federal revenue, including administering relevant tax laws.
The lawsuit comes after Binance pleaded guilty to violating anti-money laundering laws in the United States in late 2023.
The company settled the charges through a plea bargain that resulted in a $4.3 billion penalty.
This lawsuit represents a major development in regulating cryptocurrency activities in Nigeria.
The outcome of the case will be closely watched by industry players and could set a precedence for future regulation of cryptocurrency sector in Nigeria.
