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The Federal Inland Revenue Service (FIRS) has filed a lawsuit against cryptocurrency exchange Binance, demanding $79.5 billion in alleged economic losses and an additional $2 billion in back taxes for 2022 and 2023. This brings the total claim to $81.5 billion, which is nearly $20 billion (31.45%) higher than Binance’s valuation, according to calculations.
According to Reuters, the lawsuit, which was filed in the Federal High Court in Abuja, accuses Binance of operating without proper registration and failing to comply with Nigerian tax laws. FIRS asserts that Binance’s activities resulted in significant economic damage and tax evasion, prompting the legal action.
Binance has previously expressed its willingness to cooperate with Nigerian authorities to settle any tax liabilities but has not yet provided a comment on the current lawsuit.
In the legal filing, FIRS claims that Binance failed to register with the agency for tax compliance, leading to substantial economic losses for Nigeria. The Central Bank of Nigeria (CBN) conducted an assessment in May 2024, estimating that Binance’s operations caused approximately $79.5 billion in economic damages over a six-month period.
Jimada Mohammed Yusuf, a member of the Special Investigation Team from the Office of the National Security Adviser, stated in an affidavit that Binance and its executives are responsible for the economic losses incurred. He mentioned that FIRS had assessed Binance’s income tax liabilities for the years in question and issued a demand notice, which the company allegedly ignored, leading to the current legal proceedings.
The lawsuit further alleges that Binance operated covertly within Nigeria despite having a significant economic presence. The violations cited include breaches of Nigeria’s Companies Income Tax Act, the Federal Inland Revenue Service (Establishment) Act 2007, the CBN Regulatory Framework for Mobile Money Services, and the Companies Income Tax Significant Economic Presence Order.
These regulations define the conditions under which foreign and non-resident companies providing digital services are subject to taxation in Nigeria.
This legal action follows a series of regulatory measures against Binance in Nigeria. In 2024, two Binance executives were detained by Nigerian authorities amid a crackdown on the cryptocurrency industry. The company is currently contesting four counts of tax evasion and is also facing separate money laundering charges from Nigeria’s anti-corruption agency, which it denies.
As the case unfolds, it is expected to have significant implications for the operation of cryptocurrency platforms in Nigeria and may shape future regulatory approaches to digital assets within the country.
