Nigerian Government File Tax Evasion Suit Against Binance As Detained Exchange Official Escapes Custody

The Nigerian Federal Inland Revenue Service (FIRS) has filed tax evasion charges against global cryptocurrency exchange Binance after detained company official escaped custody.

The tax agency, in the suit with number FHC/ABJ/CR/115/2024 filed in Abuja on Monday, March 25, 2024, claimed that the cryptocurrency platform had contravened four tax laws including failure to pay company income tax, non-payment of value added tax (VAT), noncompliance with tax return filing obligations, and complicity in assisting its users evade taxes through its platform.

The FIRS noted that Binance’s alleged failure to collect and remit various categories of taxes to the Federal Government contravened Section 40 of the FIRS Establishment Act 2007 (amended) and attracted penalties and possible jail terms.

Binance senior executives Tigran Gambaryan and Nadeem Anjarwalla are listed alongside the crypto company as second and third defendants in the suit. However, Anjarwalla, the Regional Manager for Africa at Binance reportedly escaped custody on Friday, March 22, 2024.

The Office of the National Security Adviser (ONSA), which claimed to be unsure how Anjarwalla managed to flee the country as his passport had been seized, revealed they were seeking support from Interpol to obtain a warrant for his arrest. 

Recall that the two senior officials at Binance; a US citizen Tigran Gambaryan and a British Kenyan Nadeem Anjarwalla, were detained with their passports seized on February 26, 2024, by the ONSA.

The action was taken after the Nigerian government claimed that the activities of the tier-one crypto exchange were subverting the value of its local currency. Also, the government accused Binance of failing to register with the authorities for tax purposes, flouting existing tax laws in the country. The central bank of Nigeria added the exchange facilitated illegal transactions amounting to $26 billion in 2023 alone.

This prompted Binance to discontinue all Nigerian naira services on its trading platform in early March 2024, stating that any remaining balances on its user’s naira account would be automatically converted into TetherUSD (USDT) — a cryptocurrency stablecoin pegged to the U.S. dollar. 

Following the detentions, the Nigerian authorities demanded information about Binance’s top 100 users in Nigeria. To this end, an ex-parte order was obtained from an Abuja Federal High Court on February 29, 2024, compelling Binance to provide detailed information about all Nigerians who trade on its cryptocurrency platform to the Economic and Financial Crimes Commission (EFCC).

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