Nigeria Sues Binance for $81.5B Over Tax Evasion, Naira Devaluation

Nigeria has filed a lawsuit against Binance, the world's largest cryptocurrency exchange, alleging tax evasion and economic damages linked to the devaluation of the naira. The lawsuit, seeking $81.5 billion in damages, is the latest escalation in Nigeria's crackdown on cryptocurrency trading.

The Federal Inland Revenue Service (FIRS) contends that Binance has a "significant economic presence" in the country and failed to pay the required taxes in 2022 and 2023. The agency is also demanding a 26.75% interest payment on the allegedly unpaid taxes and holds Binance accountable for the sharp decline in the Nigerian naira's value against foreign currencies.

The lawsuit represents the culmination of months of tensions between Nigerian authorities and Binance, which escalated last year when the government detained two Binance executives on charges of tax fraud and money laundering. While those charges were later dropped, Nigeria's legal pursuit of Binance has intensified, leading to one of the largest financial lawsuits in the country's history.

Nigeria has taken an increasingly hardline stance against cryptocurrency trading, particularly as the government grapples with inflation and currency devaluation. The central bank and regulatory agencies have repeatedly expressed concerns that cryptocurrency platforms facilitate capital flight and illicit financial activities, exacerbating the naira's depreciation.

Binance had already faced heightened scrutiny from Nigerian authorities before this lawsuit. In February 2024, two executives were detained following what was supposed to be a routine meeting with regulators. Shortly afterward, in March 2024, Binance suspended naira transactions on its platform amid mounting pressure from Nigerian officials, who claimed that traders were using the exchange to manipulate forex rates and devalue the national currency.

The exchange's decision to halt naira trading was a direct response to Nigeria's increasing hostility toward digital asset platforms, which the government believes undermine its monetary policies.

The arrest and prolonged detention of Binance's former Head of Financial Crime Compliance, Tigran Gambaryan, drew international backlash, particularly from the United States. Gambaryan, a US citizen, was reportedly suffering from chronic health conditions while imprisoned but was allegedly denied adequate medical care. His detention gained widespread media attention, with calls for his release from US officials and human rights organizations.

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