Binance, the leading global cryptocurrency exchange, finds itself embroiled in a tax evasion controversy in Nigeria, as tensions between the platform and Nigerian authorities escalate. The Federal Inland Revenue Service (FIRS), the country’s tax regulator, has formally accused Binance of tax evasion. According to reports from local media outlets, this development has led to the detention of two senior Binance executives by Nigerian authorities.
The charges, brought before the Federal High Court in Abuja, allege four counts of tax evasion against Binance. These charges encompass accusations of failing to pay Value-Added Tax (VAT), Company Income Tax, neglecting to file tax returns, and purportedly assisting customers in evading taxes through the Binance platform.
The detained executives, identified as Tigran Gambaryan and Nadeem Anjarwalla, are currently held in custody by the Economic and Financial Crimes Commission (EFCC), a Nigerian law enforcement agency. The Nigerian government asserts that Binance failed to register with the FIRS for tax purposes and violated tax regulations within the country.
Among the charges is the allegation that Binance neglected to comply with Section 40 of the FIRS Establishment Act 2007, which mandates the deduction and remittance of taxes. The charges provide specific instances where Binance allegedly violated tax laws, such as the failure to issue VAT invoices, impeding the determination and payment of taxes by platform users.
Furthermore, the FIRS emphasizes that any company conducting business surpassing N25 million annually must comply with tax obligations, including Company Income Tax and the collection and remittance of Value Added Tax.
Pressure has mounted on the Biden administration to intervene diplomatically and secure the release of the detained Binance executives, who have been in Nigerian custody since February 26, 2024. The U.S. Chamber of Digital Commerce has issued appeals for urgent action to address what it perceives as a significant injustice.
In recent regulatory actions, Binance halted all services involving the Nigerian naira (NGN) due to increased scrutiny. The exchange announced the suspension of NGN withdrawals after March 8. Earlier, the Nigerian government imposed a substantial $10 billion fine on Binance as part of efforts to regulate the platform and stabilize the nation’s local currency.