The Federal Government has initiated criminal proceedings against Binance, a renowned cryptocurrency exchange platform, in a bid to uphold fiscal responsibility and safeguard the country’s financial integrity.
The charges, filed at the Federal High Court in Abuja, were announced on Monday by the Federal Inland Revenue Service (FIRS) in a statement that was issued by the media aide to FIRS chairman Dare Adekanmbi.
In the suit No. FHC ABJ/CR/115/2024, Binance was accused of four-count tax evasion charges.
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Joined with the crypto company as second and third defendants in the suit are Tigran Gambaryan and Nadeem Anjarwalla, both senior executives of Binance.
Binance is facing charges related to not paying Value-Added Tax (VAT), Company Income Tax, not filing tax filings, and assisting clients in avoiding taxes by using 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).
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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 allegedly violated tax laws, such as failing to issue invoices for VAT purposes, thus obstructing the determination and payment of taxes by subscribers.
“Any company that transacts business over 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.
“The federal government remains resolute in its commitment to ensuring compliance with tax regulations and combating financial impropriety within the cryptocurrency sector,” the statement read in part.
In late 2023, Binance allegedly entered a guilty plea to breaking US anti-money laundering rules, agreeing to a plea deal that would have cost the business $4.3 billion.
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