The Federal Government has initiated criminal proceedings against Binance, a prominent cryptocurrency exchange platform.

The charges, filed at the Federal High Court in Abuja, were announced on Monday, March 25, 2024 by the Federal Inland Revenue Service (FIRS).

The lawsuit, designated as suit number FHC/ABJ/CR/115/2024, implicates Binance with a four-count tax evasion accusation.

Joined with the crypto company as second and third defendants in the suit are Tigran Gambaryan and Nadeem Anjarwalla, both senior executives of Binance currently in the custody of the Economic and Financial Crimes Commission (EFCC).

The charges levied against Binance include non-payment of Value-Added Tax (VAT), Company Income Tax, failure to file tax returns, and complicity in aiding customers to evade taxes through its platform.

In the suit, 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.

The charges further detail specific instances where Binance purportedly violated tax laws, such as failing to issue invoices for VAT purposes, thus obstructing the determination and payment of taxes by subscribers.

Court orders Binance to release Nigerian users’ data to EFCC

Dare Adekanmbi, Special Adviser on Media to the Executive Chairman of FIRS, said the action is a decisive move aimed at upholding fiscal responsibility and safeguarding the economic integrity of the country.

“Any company that transacts business in excess of N25 million annually is deemed by the Finance Act to be present in Nigeria.

“According to this rule, Binance falls into that category. So, it has to pay taxes like Company Income Tax (CIT) and also collect and pay Value Added Tax (VAT).

“But Binance did not do this properly. So, the company broke Nigerian laws and could be investigated and taken to court for this infraction,” said Adekanmbi.

Adekanmbi, in a statement on Monday, said the Federal Government remains resolute in its commitment to ensuring compliance with tax regulations and combating financial impropriety within the cryptocurrency sector.

FIRS, by the law setting it up and various others, is empowered to assess, collect and account for revenue accruing to the Federation and administer relevant tax laws.

Binance pleaded guilty to flouting anti-money laundering laws in the United States in late 2023, settling for a plea bargain that cost the company $4.3 billion.

A Federal High Court sitting in Abuja had earlier ordered Binance Holdings Limited to provide the Economic and Financial Crimes Commission (EFCC) with the comprehensive data or information of all Nigerians trading on its platform.

To avoid issue with the Nigerian government, Binance had on March 5 announced the discontinuation of all its naira services commencing from March 8, 2024.

The company stated that all trading pairs involving naira will be removed from its platform on March 7, adding that its payment service – Binance Pay, will also remove naira from the list of supported payment options on March 6, 2024.

The Star