Binance Faces $81.5 Billion Lawsuit in Nigeria Over Taxes

They claim that most of the penalty—$79.5 billion—is due to losses incurred by the national economy, with the remaining $2 billion coming from unpaid taxes over the last five years of the platform's activity in Nigeria. The government argues that Binance’s role in allowing trades in the local currency directly triggered the collapse of the Naira and the spike in inflation.

The fine sounds outrageous. One user on platform X, going by “talos,” pointed out that the lawsuit's amount is even higher than Binance’s market cap! 

Binance's History of Legal Challenges

Nigeria isn’t new to taking legal action against the well-known crypto exchange Binance. In the past, Binance has been hit with at least four different charges related to tax issues, including not paying VAT, corporate taxes, and failing to submit tax returns, along with allegations of helping people dodge taxes via crypto transactions.

In one lawsuit, officials demanded that Binance pay corporate taxes at 26.75% annually for several years, plus a fine equal to 10% of the tax shortfall. Fortunately for Binance, their lawyers managed to overturn these claims.

Related: Nigeria Tightens the Noose

In the early months of 2024, Nigeria’s anti-corruption agency leveled a money laundering charge against Binance, a move that compounded the earlier tax controversies. Two high-ranking local executives—Tigran Gambaryan and Nadim Andjarvalla—were detained, languishing in custody for several months until their eventual release in autumn 2024, facilitated by U.S. support. President Joe Biden extended his personal thanks to Nigerian President Bola Tinubu following their release.

This surge in regulatory scrutiny followed attempts by the Nigerian government to exert greater control over the crypto domain. Despite ongoing legal challenges, Binance has consistently emphasized its cooperation with Nigeria’s Federal Inland Revenue Service on tax matters, even halting Naira trading to minimize disruption to the local economy. Rumors abound online that Binance might not even be present in Nigeria—though such claims likely refer to its official registration status.

Binance Bears No Blame for the Naira’s Plunge

Nigeria’s economy is in turmoil, beset by soaring inflation and a dramatic collapse of its national currency. The National Bureau of Statistics reveals that inflation has hovered around 25% over the past year, while the Naira has plunged over 70% against the US dollar in two short years. This rampant devaluation has decimated personal savings and forced many to seek refuge in alternative financial havens, including cryptocurrencies.

Economics is not solely defined by quantitative metrics; it is also a matter of collective psychology. The more confidence that is lost in a currency, the more precipitous its decline,

explained Coinomist’s in-house analyst, Anton Kryshtal.

When a currency’s decline spirals out of control and the crisis lingers, it morphs into a financial avalanche. Citizens, desperate to safeguard their wealth, flock to exchange the Naira for more stable assets, such as cryptocurrencies, thereby hastening its downfall. This relentless cycle only intensifies the demand for alternatives. Although a ban on Naira trading was eventually put in place to halt the slide, many believe the measure came far too late, leaving officials scrambling to assign blame.

Global Regulatory Challenges—Binance and the Crypto Industry

The legal battles confronting Binance stretch well beyond Nigeria’s borders. Over the past few years, the exchange has repeatedly found itself embroiled in lawsuits across the globe. One striking example: U.S. authorities once slapped a $4.3 billion fine on Binance for failing to adequately combat money laundering. Of that sum, about $1.5 billion was remitted to the U.S. Attorney’s Office for the Western District of Washington, representing 99% of all fines recorded by that office in 2024.

Some experts warn that growing regulatory pressure could soon bring fines against crypto firms worldwide, as nations strive to shield their economies from the potential perils of transnational digital platforms.

In the face of such challenges, crypto companies are calling for a cooperative approach and regulatory frameworks that truly reflect the nature of this evolving industry—a change they believe will pave the way for enduring stability and innovation.

Read on: Binance Under Investigation in France for Money Laundering