The Nigerian government has taken legal action against Binance, the world’s largest cryptocurrency exchange by trade volume, seeking a staggering $81.5 billion in damages and back taxes. This move marks a significant step in Nigeria’s intensified scrutiny of cryptocurrency platforms operating within its borders.
According to reuters, the Federal Inland Revenue Service (FIRS) is demanding $79.5 billion for alleged economic losses attributed to Binance’s activities, along with an additional $2 billion in unpaid taxes. The Nigerian government argues that Binance failed to register for tax compliance and has been operating illegally within the country, leading to substantial financial and economic consequences.
Allegations Against Binance
The lawsuit, filed in a Federal High Court, accuses Binance of:
• Operating without proper registration despite having a significant economic presence in Nigeria.
• Violating the Companies Income Tax Act and other financial regulations.
• Facilitating tax evasion by not remitting value-added tax (VAT) and company income tax.
• Causing major economic disruptions, with the Central Bank of Nigeria estimating losses of $79.5 billion over six months due to Binance’s influence on forex markets.
This case follows previous regulatory actions against Binance in Nigeria. In 2024, two Binance executives were detained over allegations of forex manipulation and illegal operations. The company is also facing separate tax evasion charges, including failure to file tax returns and enabling tax evasion among its users.
Binance’s Response & Industry Implications
In response, Binance has stated that it is working with Nigerian authorities to resolve any potential historical tax liabilities. However, the exchange has not yet issued an official comment on this specific lawsuit.
This legal battle could set a precedent for cryptocurrency regulations in Africa, as governments worldwide continue to scrutinize digital asset platforms. If Nigeria succeeds in its case, it may push other nations to impose stricter compliance measures on global crypto exchanges.
As the case unfolds, the crypto industry will be closely watching how Nigeria enforces its regulations and whether Binance can negotiate a settlement.
