Federal Government Launches Legal Action Against Binance Over Tax Evasion Allegations

The Federal Government has taken a significant step towards reinforcing fiscal responsibility and protecting the economic stability of the nation by initiating legal proceedings against Binance, a leading cryptocurrency exchange platform. Announced on Monday by the Federal Inland Revenue Service (FIRS), the charges, filed at the Federal High Court in Abuja, implicate Binance with a four-count accusation of tax evasion.

Accompanying the cryptocurrency company as second and third defendants are Tigran Gambaryan and Nadeem Anjarwalla, both senior executives of Binance currently in custody of the Economic and Financial Crimes Commission (EFCC). According to Dare Adekanmbi, Special Adviser, Media to the Executive Chairman of FIRS, the charges 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.

The lawsuit also alleges Binance’s failure to register with FIRS for tax purposes and violation of 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.

The charges highlight specific instances where Binance purportedly violated tax laws, such as failing to issue invoices for VAT purposes, hindering the determination and payment of taxes by subscribers. Adekanmbi emphasized that any company transacting business exceeding N25 million annually in Nigeria is obligated to pay taxes like Company Income Tax (CIT) and Value Added Tax (VAT).

The Federal Government remains committed to ensuring compliance with tax regulations and combating financial impropriety within the cryptocurrency sector. FIRS, empowered by law, is mandated to assess, collect, and account for revenue accruing to the Federation and administer relevant tax laws.

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