Nigeria Sues Binance for $79.5 Billion in Economic Damages and Back Taxes

Nigeria's Legal Action Against Binance

Nigeria has launched a lawsuit against Binance, the world's largest cryptocurrency exchange, demanding $79.5 billion in economic damages and $2 billion in back taxes. The government accuses Binance of contributing to the country's currency troubles and has previously detained two of the company's executives in 2024. Binance, which operates without formal registration in Nigeria, has not yet commented on the lawsuit but has acknowledged discussions with the Federal Inland Revenue Service (FIRS) regarding potential historical tax liabilities.

Tax Evasion Allegations and Penalties

FIRS claims Binance has a "significant economic presence" in Nigeria, making it liable for corporate income tax. The agency is pursuing legal action to compel Binance to pay income taxes for 2022 and 2023, along with a 10% annual penalty on overdue amounts. Additionally, FIRS is demanding a 26.75% interest rate on unpaid taxes, aligning with the Central Bank of Nigeria's lending rate.

Broader Regulatory Crackdown

The lawsuit is part of Nigeria's broader efforts to regulate the cryptocurrency industry. Binance faces four counts of tax evasion, including non-payment of value-added tax, company income tax, and failure to file tax returns. The exchange is also accused of aiding customers in tax evasion through its platform. Furthermore, Binance is dealing with separate allegations of money laundering by an anti-graft agency, which the company has denied.

Binance's Response and Market Impact

In response to these legal challenges, Binance announced in March that it would cease all transactions and trading involving the Nigerian naira. This move reflects the growing regulatory pressures on cryptocurrency platforms in Nigeria and highlights the complexities of operating in jurisdictions with evolving crypto regulations.