Nigeria Seeks $81.5B from Binance in Tax Evasion Case

Nigeria has initiated legal action against Binance, the world's largest cryptocurrency exchange, seeking $79.5 billion in economic damages and $2 billion in unpaid taxes. The government alleges that Binance has been involved in tax evasion and has contributed to currency fluctuations in the country. Two Binance executives were arrested in 2024, further escalating the situation.

Binance has not commented on the allegations but has announced its collaboration with Nigeria's Federal Inland Revenue Service (FIRS) for tax matters. The company has taken steps to address its existing tax responsibilities. However, the Nigerian government maintains that Binance has a "significant economic presence" in the country and should be subject to corporate taxation.

The Nigerian government has submitted a court request demanding that Binance pay taxes for 2022 and 2023, with a 10% annual surcharge on outstanding taxes. Binance faces multiple government charges for failing to pay value-added tax (VAT), refusing to submit tax reports, and enabling illicit tax evasion through its platform.

In response to the legal proceedings, Binance announced that it would discontinue all transactions and trading in the Nigerian naira starting from March 2024. Legal proceedings against Binance executives continued during this time. Previously, Binance's head of financial crime compliance, Tigran Gambaryan, stood trial before the court proceedings began. The trial resumed on September 2, 2024, after Nigerian courts restarted their operations following a break.

On October 23, 2024, the Nigerian government dropped all charges against Tigran Gambaryan. This legal decision marked a significant shift in the ongoing court battle and will likely influence Nigeria's cryptocurrency legislation and regulatory standards in other nations. The cryptocurrency sector closely follows the developments in the case, as the future of Binance's operations in Nigeria and the country's regulatory approach toward digital assets hang in the balance.