A high-profile legal battle between Nigeria Federal Inland Revenue Service (FIRS) and crypto exchange Binance has hit another pause. A Nigerian court has delayed the next hearing in the $2 billion tax evasion case until April 30, allowing time for the tax authority to respond to a legal objection raised by Binance.
Court Challenge Over Email Summons Slows Proceedings
On April 7, Binance’s legal counsel, Chukwuka Ikwuazom, challenged the legitimacy of how court documents were delivered. He argued that the order permitting the FIRS to serve legal documents to Binance via email was fundamentally flawed, since the exchange is incorporated in the Cayman Islands and does not maintain a physical office in Nigeria.
According to Ikwuazom, Nigerian law requires special permission to serve court documents beyond the country’s borders—permission that, in this case, was allegedly never granted.
“The substituted service order issued on February 11 was improper and should be nullified,” Ikwuazom asserted in court, calling into question the foundation of the ongoing proceedings.
Nigeria Pushes for Billions in Taxes and Damages
The Nigerian tax authority initiated the lawsuit earlier this year, accusing Binance of failing to pay corporate income tax and demanding the exchange cough up $2 billion in back taxes. But the claims go much further.
FIRS is also pursuing $79.5 billion in damages, alleging that Binance’s operations helped destabilize the national currency, the naira, by facilitating speculative trading and capital flight.
The FIRS is requesting that Binance be held accountable for taxes owed in 2022 and 2023, alongside a 10% annual penalty and a hefty 27% interest rate on unpaid taxes. Central to the tax authority’s argument is its belief that Binance maintained a “significant economic presence” in Nigeria, despite lacking a formal office.
The case is layered with political and legal tension, especially in light of the arrests of two Binance executives earlier this year. Tigran Gambaryan, a U.S. citizen, was held for several months before being released in October after suffering serious health complications. His colleague, Nadeem Anjarwalla, made headlines when he escaped custody and fled to Kenya.
Following these developments, Binance officially suspended naira transactions and exited the Nigerian market in March 2024.
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