Nigeria files tax evasion charges against Binance

In a new development, Nigeria’s tax agency, the Federal Inland Revenue Service (FIRS) has filed tax evasion charges against the world’s largest cryptocurrency exchange Binance.

Joined with the crypto company as second and third defendants in the suit are Tigran Gambaryan and Nadeem Anjarwalla, both senior executives of Binance currently under the custody of the Economic and Financial Crimes Commission.

In the suit with number FHC/ABJ/CR/115/2024, the FIRS filed four counts of tax evasion in Abuja, today.

The charges include non-payment of value-added tax (VAT), company income tax, failure to file tax returns, and complicity in helping customers evade taxes through its platform. The Federal Government also accused Binance of failure to register with FIRS for tax purposes and contravening existing tax regulations within the country.

A notable item in the suit references Binance’s alleged failure to collect and remit various categories of taxes to the federation as stipulated by Section 40 of the FIRS Establishment Act 2007 (amended). Section 40 of the Act explicitly addresses the non-deduction and non-remittance of taxes, prescribing penalties and potential imprisonment for defaulting entities.

Specifically, the document detailed instances where Binance violated tax laws, such as failing to issue invoices for VAT purposes, thus obstructing the determination and payment of taxes by subscribers.

“Any company that transacts business above N25 million annually is deemed by the Finance Act to be present in Nigeria. According to this rule, Binance falls into that category. So, it has to pay taxes like Company Income Tax (CIT) and also collect and pay Value Added Tax (VAT). But Binance did not do this properly. So, the company broke Nigerian laws and could be investigated and taken to court for this infraction,” the document said.

Recall that Binance pleaded guilty to flouting anti-money laundering laws in the United States in late 2023. This led to a plea bargain arrangement that cost the company $ 4.3 billion.

Also read: Detained Binance executive Nadeem Anjarwalla allegedly escapes from custody in Nigeria

Binance Executive is custody escapes

We reported earlier today that one of two Binance executives detained in Nigeria, Nadeem Anjarwalla has reportedly escaped from EFCC custody. Nadeem Anjarwalla, Binance Africa’s Regional Manager was detained alongside his colleague, Tigran Gambaryan, who oversees financial crime compliance.

The circumstances surrounding Mr Anjarwalla’s escape from the country remain unclear seeing as he managed to get on an international commercial flight even though the British passport with which he entered Nigeria, was seized by Nigerian authorities upon his arrest. However, an immigration official told Premium Times that the Binance executive fled Nigeria on a Kenyan passport. 

According to the report,  Mr Anjarwalla, a 38-year-old Brit who also has Kenyan citizenship, escaped last Friday from the Abuja guest house where he and his colleagues were detained.

The incident took place after guards on duty led him to a nearby mosque for prayers in the spirit of the ongoing Ramadan fast. After prayers, it was discovered that Mr Anjarwalla had escaped.  He is believed to have flown out of the country using a Middle East airliner.

How it all started

For three weeks now, Tigran Gambaryan, a former crypto-focused US federal agent, and a Kenyan Binance executive, Nadeem Anjarwalla have been stripped of their passports and held in confinement at a government property in the Nigerian capital of Abuja by the office of the National Security Adviser.

The two Binance executives were said to have been detained at a “comfortable guest house” and allowed many privileges despite being under arrest. These privileges include the use of telephones, and Mr Anjarwalla is believed to have exploited that privilege to plan his escape.

According to a Financial Times report, the two executives were detained as part of the government’s actions to arrest the free fall of its local currency, the Naira. The report claimed that the executives flew to Nigeria following the country’s decision to ban several cryptocurrency trading websites in the previous week.

According to a report by Reuters, the two employees appeared in a Federal High Court in the capital Abuja last Tuesday. The report indicated that lawyers of the Economic and Financial Crimes Commission (EFCC) requested the court to grant a new detention order after the initial one expired on March 12. The lawyers of the Binance executives opposed the request.

Read also: Court orders Binance to share transaction details, names of Nigerian users with the EFCC

Recall that a high court which sat in Abuja ordered Binance to provide comprehensive information about all Nigerian users trading on its platform to the country’s economic anti-graft agency, the Economic and Financial Crimes Commission (EFCC).

According to a report by the Nigeria News Agency (NAN), High Court Judge, Justice Emeka Nwite granted the interim order after ruling on the ex parte motion application (FHC/ABJ/CS/259/2024) dated and filed on 29th February 2024 by EFCC’s lawyer, Ekele Iheanacho. The interim order enabled the anti-graft agency to unravel the alleged money laundering and terrorism financing on Binance, a cryptocurrency exchange platform.

This followed an order by the Federal Government of Nigeria to Binance to reveal its top 100 users in the country as part of its investigations into the activities of the exchange. The government also ordered Binance to release all transaction history over the past 6 months.

Read also: CBN Gov says $26bn from unidentified people passed through Binance Nigeria in the last year