The Nigerian government has filed an $81.5 billion lawsuit against Binance, the world’s largest centralized cryptocurrency exchange by trading volume. The lawsuit demands $2 billion in back taxes and $79 billion in economic damages, alleging that Binance played a role in crashing Nigeria’s local currency, the naira.
According to Reuters, Nigeria’s Federal Inland Revenue Service (FIRS) claims that Binance has a “significant economic presence” within the country and owes unpaid taxes from 2022 and 2023. The FIRS is also seeking a 26.75% interest payment on the alleged back taxes. The agency accuses Binance of contributing to the naira’s depreciation in foreign exchange markets.
Detention of Binance Executives Amid Allegations
The legal dispute follows the detention of two Binance executives, Tigran Gambaryan and Nadeem Anjarwalla, by Nigerian authorities. Both were accused of tax fraud and money laundering. The executives were unexpectedly detained in February 2024 during a meeting that was meant to be a routine discussion with state regulators.
Following the detentions, Binance halted all naira trading activities on its platform in March 2024, citing complaints from Nigerian officials that trading on the platform was destabilizing the naira.
International Pressure and Release of Gambaryan
The detention of Gambaryan, who is a US citizen, sparked international attention, especially after reports emerged that he was denied adequate medical care despite his chronic health conditions. In July 2024, US Representative Rich McCormick introduced a resolution labeling Gambaryan’s detention as a hostage situation, urging his immediate release.
US diplomats, including Ambassador Richard Mills, pressured the Nigerian government, leading to the withdrawal of money laundering charges against Gambaryan by Nigeria’s Economic and Financial Crimes Commission in October 2024. Gambaryan was subsequently released from prison on October 23, 2024, after nearly seven months of detention and a lengthy legal battle.
Binance has not yet publicly responded to the lawsuit. The case is expected to be closely watched by the crypto community and could set a precedent for regulatory actions against crypto exchanges worldwide.
