Binance faces a lawsuit from Nigeria, alleging economic damages and tax evasion, seeking compensation of approximately $81.5 billion.
In a series of legal battles, cryptocurrency exchange Binance is facing a lawsuit from the Nigerian government, seeking $79.5 billion in damages for alleged economic losses and an additional $2 billion in unpaid taxes. The Nigerian Federal Inland Revenue Service (FIRS) accuses Binance of having a significant economic presence in the country, making it liable to pay taxes.
The allegations against Binance are severe, with the government claiming that the exchange's operations have contributed to the crash of the Nigerian naira. The FIRS also alleges that Binance has been operating without proper registration and licensing, a violation of Nigerian law.
The lawsuit is not the first legal challenge Binance is facing in Nigeria. Ongoing court cases accuse the exchange of tax evasion and money laundering. The government's spokesperson, Bayo Onanuga, has further demanded that Binance pays up to $10 billion in reparations and damages for allegedly sabotaging the Nigerian economy.
Binance has not publicly responded in detail to the Nigerian lawsuit. However, the exchange did deny causing the naira's decline, attributing it instead to the removal of the currency's peg. Following the arrests of two Binance officials, Tigran Gambaryan and Nadeem Anjarwalla, Gambaryan later confirmed allegations that Nigerian officials requested a $150 million bribe from Binance to 'make the problems go away.'
Key points of the Nigerian government's allegations against Binance include:
- Operating without proper registration and licensing, deemed illegal by Nigeria’s Securities and Exchange Commission (SEC).
- Causing an estimated $81 billion in economic losses related to the naira's crash, termed economic sabotage.
- Owing $2 billion in unpaid taxes.
- Enabling terrorists and kidnappers to funnel funds through Binance, contributing to insecurity.
- Facilitating illegal foreign exchange activities through Binance’s P2P platform, which led to regulatory crackdowns and arrests of Binance executives in Nigeria.
In response to the mounting legal pressure, Binance ended its Nigerian Naira P2P services in March 2024. However, the company has not issued an official public statement addressing the full scope of the allegations or lawsuit.
The downward spiral of the naira did not stop when Binance disabled its P2P trading platform in Nigeria, proving that it had nothing to do with it in the first place. It remains unclear how the FIRS or the court intends to assess Binance's actual earnings in Nigeria from 2022 to 2023.
A lawmaker named in the bribery allegation, Philip Agbese, has sued Gambaryan for defamation. The legal proceedings against Binance are complex, with delays and procedural hurdles slowing progress. The broader cases—tax evasion, money laundering, and the massive $81 billion economic sabotage claim—are still largely in limbo, suggesting a slow-moving legal confrontation.
- The Nigerian government claims that Binance's operations, which caused the naira's crash, amount to economic sabotage, resulting in estimated losses of $81 billion.
- Binance is accused of owing $2 billion in unpaid taxes in Nigeria, as well as violating the country's laws by operating without proper registration and licensing.
- The Nigerian Securities and Exchange Commission (SEC) deems Binance's operations without registration and licensing illegal.
- The legal battles between Binance and the Nigerian government also involve allegations of Binance enabling terrorists and kidnappers to funnel funds through the exchange, contributing to insecurity.
- The Nigerian government's lawsuit against Binance has been complicated by procedural hurdles and delays, with key cases like tax evasion, money laundering, and economic sabotage still largely in limbo.
