The Nigerian government, through the Federal Inland Revenue Service (FIRS), has taken legal action against Binance Holdings Limited, demanding an extraordinary sum of $79.5 billion and N231 million in alleged economic losses linked to the company’s operations in Nigeria.
Additionally, the government is seeking $2 billion in unpaid corporate income taxes for the fiscal years 2022 and 2023, marking a dramatic escalation in the legal battle between Nigerian authorities and the world’s largest cryptocurrency exchange.
The latest lawsuit, filed at the Federal High Court in Abuja, accuses Binance and two of its executives, Tigran Gambaryan and Nadeem Anjarwalla, of operating unlawfully within the country. The Nigerian authorities claim Binance failed to register with the FIRS for tax compliance, violated multiple regulatory provisions, and ultimately caused significant financial harm to the nation.
According to court documents, the government is imposing additional penalties on Binance, including a 10% fine for non-payment of income taxes for 2022 and 2023. Furthermore, it is demanding a 26.75% interest rate—corresponding to the prevailing Central Bank of Nigeria (CBN) lending rate—on the unpaid amounts, calculated from January 1, 2023, and January 1, 2024, respectively.
Nigerian authorities allege that Binance intentionally obscured its business activities despite having what they describe as a “significant economic presence” in Nigeria. The lawsuit cites violations of the Companies Income Tax (CIT) Act, the Federal Inland Revenue Service (Establishment) Act 2007, the CBN’s Regulatory Framework for Mobile Money Services, and the Significant Economic Presence (SEP) Order.
The SEP Order, enacted in May 2020, mandates that foreign companies engaged in digital services become subject to Nigerian taxation if they meet specific criteria, such as generating an annual gross turnover of at least N25 million (or its equivalent in other currencies).
The case against Binance is built on findings from an investigation by the Office of the National Security Adviser (NSA), conducted in collaboration with the FIRS and other regulatory agencies. Investigators claim that Binance has been operating in Nigeria for over six years without registering with the appropriate tax authorities.
In an affidavit submitted to the court, Jimada Mohammed Yusuf, a member of the NSA’s Special Investigation Team, stated that Binance executives themselves confirmed the company’s long-standing presence in Nigeria. During a meeting with the Securities and Exchange Commission (SEC) in 2024, Binance representatives allegedly acknowledged having 386,256 active Nigerian users on its platform, with a trading volume of $21.6 billion and net revenue of $35.4 million for the year 2023.
Nigerian authorities have accused Binance and its executives of multiple infractions, including offering financial services without necessary licenses, operating without required permits, failing to comply with the Money Laundering Act, and providing currency speculation services without authorization. The government also claims that Binance unlawfully facilitated trading in the Nigerian naira on its platform even after supposedly delisting the currency following an investigation by the NSA.
The affidavit further alleges that Binance obstructed Nigerian regulators by refusing to provide full disclosure of its financial records for the past six years. Yusuf informed the court that despite multiple demands from the NSA and a Federal High Court order requiring Binance to submit its business records to the FIRS through the Economic and Financial Crimes Commission (EFCC), the company failed to comply.
With Binance allegedly refusing to settle its tax obligations, the FIRS has asked the court to declare that the company is liable to pay annual corporate income tax to Nigeria for maintaining a significant economic presence in the country. The tax agency is also requesting a ruling affirming that Binance and its executives must file income tax returns for 2022 and 2023.
The FIRS is seeking a court order compelling Binance to pay $2 billion in outstanding income taxes for the two years in question, along with an additional 10% annual penalty on unpaid taxes. It is also demanding that Binance pay a 26.75% interest rate—reflecting the prevailing CBN lending rate—on the outstanding amounts until full payment is made.
Additionally, the FIRS wants Binance to compensate the Nigerian government with $79.5 billion and N231 million, which it claims represent the economic losses caused by the company’s operations in Nigeria.
Legal Battle Intensifies After Bribery Allegations
The lawsuit comes amid heightened tensions following explosive bribery allegations made by Binance executive Tigran Gambaryan. Gambaryan recently accused three Nigerian lawmakers—Peter Akpanke, Philip Agbese, and Ginger Obinna Onwusibe—of demanding a $150 million bribe from Binance during negotiations. The lawmakers have denied the allegations, with Agbese calling the claims defamatory.
The bribery controversy has further complicated Binance’s legal troubles in Nigeria, as the government continues to crack down on the crypto exchange. This lawsuit is the third major legal action taken by federal agencies against Binance, with separate cases pending on charges of tax evasion, money laundering, and foreign exchange violations.
Analysts Warn of Chilling Effect on Investors
The escalating legal actions against Binance have sparked concern among financial analysts and investment experts, who warn that Nigeria may be setting a dangerous precedent capable of scaring off foreign investors.
SBM Intelligence, a leading risk consultancy firm, has warned that the Nigerian government’s aggressive approach—combined with the bribery allegations—could severely damage the country’s reputation as an investment destination. The firm noted that potential investors, especially in the digital finance and technology sectors, might view Nigeria as a hostile environment where regulatory risks are too high.
Others have argued that while enforcing tax compliance is necessary, Nigeria’s handling of the Binance case could deter international companies from expanding operations in the country. Some observers have drawn comparisons to similar regulatory crackdowns in other nations, but argue that the magnitude of the fines and the allegations of government officials seeking bribes make the Nigerian case particularly troubling.
Meanwhile, Binance continues to deny all charges, maintaining that it has always operated within the bounds of Nigerian law.
The case before Justice Inyang Ekwo of the Federal High Court in Abuja has been adjourned to March 3, 2025, while other proceedings against Binance remain ongoing before Justice Emeka Nwite in a separate lawsuit filed by the FIRS and EFCC.
