Legal Battle: FIRS Demands $81 Billion from Binance Holdings Limited
Nigeria’s Federal Inland Revenue Service (FIRS) has taken legal action against Binance Holdings Limited, demanding over $81 billion in unpaid taxes and penalties. This claim includes $79.5 billion in economic damages and an additional N231 million ($153,223) tied to Binance’s operations. The tax authority also seeks nearly $2 billion in outstanding income tax for 2022 and 2023.
Unprecedented Financial Penalty
This demand significantly surpasses the $4.3 billion penalty Binance paid to U.S. regulators last year, making it the most significant financial penalty ever imposed on a crypto firm by a national government.
Nigeria’s Allegations Against Binance
Failure to Disclose Business Activities
- FIRS argues that Binance failed to disclose its business activities in Nigeria while benefiting from its vast user base.
Violation of Tax Laws
- The agency claims the exchange violated the Companies Income Tax (CIT) Act and the Significant Economic Presence (SEP) Order, which applies to foreign firms earning at least N25 million ($30,000) annually from Nigerian customers.
Revenue Generation
- According to FIRS, Binance generated $35.4 million in net revenue from a trade volume of $21.6 billion in 2023.
Penalties and Charges
- The tax claim includes a 10% penalty for tax evasion and a 26.75% interest charge from Jan. 1, 2023, to Jan. 1, 2024.
- Authorities alleged that Binance operated unauthorized financial services and failed to comply with anti-money laundering regulations, causing economic harm to Nigeria.
Legal Controversy
This lawsuit is part of Nigeria’s broader crackdown on Binance, following the withdrawal of previous charges against Binance executive Tigran Gambaryan. Gambaryan has accused Nigerian officials of corruption, claiming that authorities targeted Binance to divert attention from internal economic challenges. However, the Nigerian government has refuted these accusations, describing them as false and baseless.
