Accused of tax evasion, illegal operations and sinking the naira, Binance faces an $81.5bn lawsuit and detained executives. The fight could reshape crypto in Africa’s biggest economy.
Binance, one of the world’s largest cryptocurrency exchanges, has been operating in Nigeria for several years. The government now claims that Binance has been doing so illegally, without the necessary licences or tax registrations.
Authorities accuse Binance of contributing to the devaluation of the naira, evading billions in taxes and facilitating money laundering. As a result, Nigeria has taken legal action, including detaining Binance executives and filing a lawsuit seeking $81.5bn in damages.
Why does Nigeria believe Binance is illegal?
The Nigerian government argues that Binance has been operating in the country for six years without registering with the appropriate regulatory bodies. They claim Binance has no official licence to offer financial services in Nigeria and that it has also failed to register for tax purposes. This lack of compliance, according to authorities, means that Binance has effectively been running an unregulated financial operation within Nigeria.
How does Nigeria say Binance has impacted the naira?
The government claims that Binance has contributed to the depreciation of the naira by making it easier for Nigerians to trade their local currency for dollars and other foreign currencies. Because cryptocurrency platforms like Binance allow users to exchange naira for stablecoins or other digital assets that can be converted to foreign currencies, Nigerian authorities argue that Binance has increased demand for dollars, putting downward pressure on the value of the naira.
Is Binance accused of tax evasion?
Yes. The Nigerian government is demanding $2bn in unpaid taxes from Binance for the years 2022 and 2023. Authorities argue that Binance has facilitated billions of dollars’ worth of transactions in Nigeria but has not paid taxes on its operations, depriving the country of significant revenue.
What legal action has Nigeria taken against Binance?
Nigeria has launched multiple legal actions against Binance. The most high-profile is an $81.5bn lawsuit, which seeks:
- $79.5bn in alleged economic damages, based on claims that Binance’s activities have harmed the Nigerian economy.
- $2bn in back taxes that the government says Binance owes.
Why were Binance executives detained?
In February 2024, Nigerian authorities detained two Binance executives who had travelled to the country: Tigran Gambaryan, an American citizen, and Nadeem Anjarwalla. They were charged with tax fraud and money laundering. Their detention significantly escalated the conflict between Binance and Nigeria, especially since Gambaryan’s US citizenship led to diplomatic pressure from Washington.
What was the US government’s response to Gambaryan’s detention?
The US government became involved in negotiations for Gambaryan’s release. After months of diplomatic pressure, he was freed in October 2024. His release highlighted how the Binance case had become an international issue, drawing in governments beyond Nigeria.
Did Binance try to secure Gambaryan’s release through a bribe?
The Nigerian government claims that Binance offered a $5m payment to secure Gambaryan’s release, which officials say they rejected. If true, this allegation could have serious legal consequences for Binance, both in Nigeria and internationally. Binance has not publicly confirmed or denied the claim.
How has Binance responded to the face-off?
Binance and its executives have strongly pushed back against Nigeria’s allegations. Gambaryan, Binance’s head of financial crime compliance, accused Nigerian lawmakers of demanding a $150m bribe to prevent his arrest and prosecution. He also dismissed claims by the Central Bank of Nigeria that Binance enabled $26bn in capital flight, arguing that the figure reflects cumulative trade volume rather than actual money leaving the country.
Meanwhile, Binance has denied any involvement in money laundering and insists it is working with Nigerian authorities to address regulatory and tax concerns. After months of mounting pressure, the company officially exited the Nigerian market in March 2024.
What other legal battles does Binance face in Nigeria?
Beyond the $81.5bn lawsuit, Binance faces additional charges, including money laundering and operating without a licence. These cases add to Binance’s growing legal troubles in the country.
How does this case fit into the global crackdown on cryptocurrency exchanges?
Many governments worldwide are increasing their scrutiny of cryptocurrency exchanges, seeing them as potential threats to financial stability and sources of tax evasion. In several countries, authorities are tightening regulations to prevent money laundering and capital flight.
Nigeria’s case against Binance reflects broader concerns about the role of crypto exchanges in emerging markets. With Nigeria facing economic difficulties, authorities see controlling digital currency transactions as key to stabilising the naira and preventing further financial instability.
What does this mean for Binance’s future?
This is one of Binance’s biggest regulatory challenges to date. If Nigeria succeeds in its legal actions, it could set a precedent for how other governments handle cryptocurrency exchanges operating within their borders. The outcome could impact Binance’s ability to continue operations in Nigeria and other emerging markets where regulatory frameworks for crypto remain unclear.
(The Africa Report)
