The Nigerian government has intensified its legal battle against Binance, the world's largest cryptocurrency exchange, seeking $81.5 billion in damages for alleged tax evasion and destabilizing the local currency, the naira.
Allegations Against Binance
Nigeria's Federal Inland Revenue Service accuses Binance of failing to pay $2 billion in taxes from 2022 to 2023. The agency also seeks a 26.75% interest rate on the unpaid amount, based on the Central Bank of Nigeria's lending rate. Additionally, officials claim Binance caused economic harm by enabling currency speculation, demanding an additional $79 billion in compensation for contributing to the naira's volatility in the forex market.
Nigeria’s Crackdown on Crypto
Nigeria is tightening regulations on digital assets, accusing exchanges of facilitating money laundering and tax evasion. Binance and its executives have previously faced charges of money laundering, with five counts filed by Nigeria’s Economic and Financial Crimes Commission. They also faced four tax-related charges, including non-payment of VAT and corporate income tax. Despite these accusations, Binance asserts that it is cooperating with Nigerian authorities to resolve tax disputes.
Binance’s Response and Global Implications
Binance denies the allegations, claiming it does not operate a registered entity in Nigeria. The company emphasizes compliance efforts, including halting naira transactions in March 2023. However, Nigerian authorities argue Binance has a 'significant economic presence,' making it liable for corporate taxes. In response to the latest lawsuit, Binance has yet to issue a public statement but faces increasing regulatory pressure globally. The lawsuit in Nigeria compounds Binance’s legal troubles, which include challenges in the U.S.
The legal battle in Nigeria intensifies Binance’s challenges and could set a precedent for crypto regulation by other governments.
