- Nigerian authorities have escalated their Binance crackdown.
- In the latest instance, the government has charged the exchange with multiple counts of tax evasion.
- The charges follow the reported escape of a detained Binance executive.
Over the past month, Binance‘s operations in Nigeria have come under intense scrutiny, and the ongoing crackdown shows no signs of slowing down.
So far, the exchange has been forced to shut down its naira p2p service and has seen two executives detained amid allegations of aiding currency manipulation and illicit money flows. However, a new twist has emerged as investigations into the latter continue, aided by a recent court order requesting Binance customer data.
In the latest instance, Nigeria’s tax authorities have joined the fray, wasting no time to slap the leading crypto exchange with formal charges.
Binance Faces Criminal Proceedings in Nigeria
The Nigerian Federal Inland Revenue Service (FIRS) has filed a criminal case against Binance for tax evasion, naming Tigran Gambaryan and Nadeem Anjarwalla, senior executives of the exchange who have been detained in the country, as second and third defendants, according to local news reports on Monday, March 25.
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The four-count charges outlined in the lawsuit include “non-payment of Value-Added Tax (VAT), Company Income Tax, failure to tax returns, and complicity in aiding customers to evade taxes through its platform.”
Justifying the case, media aide to the FIRS Chairman Dare Adekanmbi contended that Binance legally met the transaction threshold to be recognized as having a presence in Nigeria and, as such, be liable to tax rules.
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"Any company that transacts business in excess of 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."
Nigerian central bank governor Olayemi Cardoso asserted that $26 billion passed through “Binance Nigeria” in 2023 alone.
The recent lawsuit follows reports that one of the Binance executives, Nadeem Anjarwalla, has fled detention.
A Daring Escape?
Anjarwalla reportedly fled Nigerian detention on Friday, March 22, after being led to a nearby mosque to pray amid the ongoing Ramadan fast. The Binance executive with British and Kenyan citizenship is believed to have moved from the mosque to the Abuja airport, where he boarded a “Middle East airliner” out of the country.
The escape has triggered multiple questions, as Nigerian authorities had supposedly seized Anjarwalla’s British passport and other travel documents during his detention. While one report suggests that the Binance executive fled with a Kenyan passport, authorities remain perplexed about how the document came into his possession.
Authorities have launched an investigation into the matter while also declaring plans to seek the help of Interpol to bring Anjarwalla back into custody.
Before Anjarwalla’s escape, the legality of the detention of the Binance executives had come under significant scrutiny. Speaking with DailyCoin last week, TEMPLARS Associate Albright Emmanuel alluded that holding suspects in detention pending the completion of an ongoing investigation was not an uncommon practice in Nigeria and is legal so long as authorities can obtain a remand order.
Nigerian authorities obtained a second such order on Wednesday, March 20, receiving legal backing to keep the Binance executives for 16 more days pending a hearing on their detention on April 5.
On the Flipside
- Binance has yet to respond to recently filed charges.
- Binance could face additional charges as authorities are still conducting investigations as to whether the exchange facilitated illicit money flows for terrorism financing and money laundering.
- Binance’s Gambaryan remains in Nigerian custody.
Why This Matters
The tax evasion charges broaden the scope of the recent crackdown on Binance. They could set the exchange up for a legal battle on two fronts in the most populous African country while strengthening the justification for authorities to hold on to detained executives.
Read this for more on the Binance-Nigeria Saga and the hunt for the exchange’s customer data:
Binance Nigeria User Data Hunt Escalates with Court Order
Learn about the outage recently faced by Polygon zkEVM:
Polygon zkEVM Outage Resolved: What Led to the Network Halt?
