The Federal Government of Nigeria, through its Federal Inland Revenue Service (FIRS), has brought criminal charges against Binance, a prominent cryptocurrency exchange platform, The Global News reports.
The charges, filled at the Federal High Court in Abuja under case number FHC/ABJ/CR/115/2024, alleges Binance of committing four distinct tax offenses.
They 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 contends that Binance’s platform facilitated tax evasion among its customers.
FIRS in a statement released on Monday in Abuja, emphasized that the lawsuit transcends mere registration concerns, asserting that Binance has neglected to comply with prevailing Nigerian tax regulations.
According to the 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, the 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 alleges that Binance’s operations violated established tax regulations in Nigeria.
The FIRS provided details to support its claims.
The lawsuit identifies Tigran Gambaryan and Nadeem Anjarwalla, senior executives at Binance, who are currently in the custody of the Economic and Financial Crimes Commission (EFCC), as the second and third defendants.
FIRS reiterated its commitment to enforcing tax regulations and combatting financial misconduct within the cryptocurrency sector. The agency is mandated by law to assess, collect, and account for federal revenue, including the administration of relevant tax laws.
The legal action follows Binance’s admission of guilt to violating anti-money laundering laws in the United States in late 2023. The company settled the charges through a plea bargain, resulting in a $4.3 billion penalty.
The lawsuit marks a significant development in regulating cryptocurrency activities in Nigeria. The outcome of the case will be closely monitored by industry stakeholders and could establish a precedent for future regulation of the cryptocurrency sector in the country.