Cryptocurrency exchange Binance has asked the Federal High Court in Abuja to set aside an alleged “purported substituted service” of the Nigerian government’s $79.5 billion economic loss fine and unpaid income tax suit against it.
The request, made on Monday, was contained in a motion made by Chukwuka Ikwuazom SAN, counsel for Binance, where he asked the court to set aside the order because the Federal Government (FG), through the Federal Inland Revenue Service (FIRS), did not obtain a leave from the court to serve court documents on Binance outside Nigeria. Binance does not have a physical office in Nigeria.
“On the whole, the order for the substituted service as granted by the court on February 11, 2025, on Binance who is … registered under the laws of Cayman Islands and resident in Cayman Islands is improper and should be set aside,” Ikwuazom said.
Recall that in the FIRS case filed by Kanu Agabi SAN, Binance and two of its executives, Tigran Gambaryan and Nadeem Anjarwalla, were accused of contravening Nigerian laws by failing to register with the FIRS for tax compliance and causing economic losses to the country during the period under review.
The lawsuit alleged that the crypto company deliberately concealed its business activities despite having a “significant economic presence” in Nigeria.
When the case was first presented before Justice Inyang Ekwo of the Federal High Court in Abuja on February 11, 2025, the legal team representing Binance and its executives was absent from those proceedings. Agabi then informed the court that attempts to serve Binance directly had been unsuccessful, prompting him to file a motion for substituted service on February 7, 2025.
A substituted service is a legal procedure that allows court documents to be delivered through alternative means when direct service fails. Justice Ekwo had granted the request and ordered that the substituted service be carried out within seven days.
See Also: FIRS wants Binance to pay $79.5bn for ‘economic loss’ and $2 million for tax evasion.
While in court on Monday, also appearing before Justice Inyang Ekwo, Ikwuazom further argued in his motion that substituted service of a process on a defendant outside jurisdiction can only be made where the government or a court of the foreign country where the process was intended to be served certifies to the Court that the efforts made to serve the process have failed.
“Where an order for substituted service is issued by this Honourable Court, service of the order and the process or document to be served outside jurisdiction can only be made through the Federal Ministry of Justice,” he added, noting that the order for substituted service is invalid and liable to be set aside.
Ikuazom likewise highlighted that the email address [email protected] which the FIRS provided in its application for the substituted service and to which the Court ordered that the Originating Processes be sent by way of substituted service on the Applicant is not owned by Eleanor Hughes or any other employee or officer of the Binance.
Moreover, Agabi told the court that the cryptocurrency firm served them with the said motion this morning and requested the court to give him time to respond to the motion.
The court then adjourned the tax evasion case against Binance to April 30 to allow the local tax authority to respond to a request by the cryptocurrency exchange.
Recap of the Binance case
Following the sudden crash of the naira currency in May 2023, the Federal Government of Nigeria accused Binance of involvement in disrupting the currency. As a result, the Economic and Financial Crimes Commission (EFCC) and FIRS separately sued Binance over alleged tax evasion, money laundering, and foreign exchange violations.
On his visit to Nigeria, Gambaryan was detained after the cryptocurrency company was accused of being involved in cybercrimes to the tune of about $34 million. Another executive, Nadeem Anjarwalla, was held in custody alongside Gambaryan for several months. However, the former later escaped from detention.
After several back and forths surrounding his detention and push for release, Tigran Gambaryan, who has been held at the Kuje Correctional Center Abuja since April 2024 was released in October 2024 due to his deteriorating health status and other diplomatic interventions.
In February, the FIRS placed a request to the Federal High Court in Abuja to order the cryptocurrency exchange platform, Binance, to pay $79,514,055,594.40 and N231 million for economic losses allegedly caused by its operations in Nigeria. It also requested a $2,001,000,000 penalty for tax evasion during 2022 and 2023.
These financial requests include a 10 per cent penalty for non-payment of income tax for 2022 and 2023 and a 26.75 per cent interest rate from January 1, 2023, and January 1, 2024. The platform was also accused of violating Nigerian laws by failing to register with the FIRS for tax compliance and causing economic losses to the country during the period under review.
The FIRS lawsuit alleged that Binance operated in secret despite having a substantial economic presence in the country. Also, the violations cited breaches such as Nigeria’s Companies Income Tax (CIT) Act, the Federal Inland Revenue Service (Establishment) Act 2007, the CBN Regulatory Framework for Mobile Money Services, and the CIT Significant Economic Presence (SEP) Order.
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