The Federal High Court on Friday discharged Tigran Gambaryan, a 39-year-old American, and fleeing Nadeem Anjarwalla from the Federal Inland Revenue Service (FIRS) tax evasion case against the cryptocurrency exchange platform, Binance.
The court made the decision in a short ruling following fresh amended charges filed by the FIRS in view of a notice from Binance about its appointment of a Nigerian representative by the name of Ayodele Omotilewa.
Nairametrics previously reported that FIRS had on March 22, 2024, filed legal proceedings against the cryptocurrency exchange platform and Gambaryan alleging tax evasion.
On May 17 2024, the FIRS amended its lawsuit, alleging Binance allegedly failed to collect and remit various categories of taxes to the federation, particularly the Value Added Tax (VAT) and Company Income tax (CIT), as stipulated by Section 40 of the FIRS Establishment Act 2007 as amended.
The Minister of Information, Idris Mohammed, had said that the cryptocurrency trading platform, Binance, had a turnover of over $20 billion in Nigeria in 2023 alone.
Following the agreement by the legal team on both sides, Justice Emeka Nwite had further adjourned to today, June 14 for the arraignment of Binance and Gambaryan.
What transpired in court
At the resumed proceedings on Friday, counsel for Binance, Tonye Krukrubo SAN, told Justice Emeka Nwite that his client has forwarded the name of its official representative to the FIRS and to the court.
Counsel for the FIRS, Moses Idehu, confirmed the same and asked the court’s permission to substitute all the previous charges with the fresh amended one dated June 13, 2024.
In FIRS’ fresh charge as seen by Nairametrics, Binance is now listed as the sole defendant implying Gambaryan and Nadeem are no longer associated with its case.
In the charge, the Binance trading platform was accused of offering services ( in the buying and selling of cryptocurrencies and the remittance and transfer of those assets) to Nigerians while failing to deduct the necessary Value Added Taxes(VAT), arising from its operations.
“That you BINANCE HOLDINGS LTD on or about the 1st February 2024, in Abuja, FCT within the Jurisdiction of this Honourable Court, whilst involved in the offering of services to subscribers on your trading platform, known as Binance did aid and abet those subscribers on your trading platform to unlawfully refuse to pay taxes, or neglect to pay those taxes and in so doing committed an offence contrary to and punishable under the provisions of S.94 of the Companies Income Tax Act (as amended),” Count 4 of the four-count charge reads.
However, Idehu urged the court to direct that the Binance representative from Nigeria should enter the dock and take his plea on behalf of the corporation he represents.
Krukrubo and Gambaryan’s legal team contended that Nigerian law does not mandate a representative of a company that is sued to stand inside a dock and take a plea.
They argued that a representative of a company that is sued may not need to attend proceedings and can even write a letter to the court in respect of the company’s position on a matter.
The defense seized the moment and urged the court to discharge Gambaryan and Nadeem from the FIRS case since a representative had been officially sent to the proceedings.
The FIRS also confirmed that the matter is now between the federal government and Binance.
What the judge said
Nwite said on the issue of whether the representative of Binance should be in the dock, parties should file a written address on it so he can rule on it.
Subsequently, he held that the “charges filed on March 22, 2024 and May 17, 2024 are hereby struck out.”
The judge also struck out the names of Gambaryan and Nadeem from the case directing that the case is adjourned to July 12 for plea.
He added that the lawyers to the parties should file processes on whether the Nigerian representative should be in the dock or not.
Nairametrics reports that this ruling is on the FIRS matter as detained Gambaryan and Nadeem are still defendants in the case filed by the Economic and Financial Crimes Commission (EFCC).
Backstory
The Federal Government had accused the cryptocurrency exchange of influencing foreign exchange (FX) rates, resulting in stricter oversight of crypto trading platforms.
The EFCC is separately prosecuting Binance and its executives over alleged money laundering and foreign exchange contravention.
On February 28, 2024, Nigerian authorities detained two senior Binance executives: Nadeem Anjarwalla, a 37-year-old British-Kenyan, who serves as the regional manager for Africa, and Tigran Gambaryan, a 39-year-old American, who is the head of financial crime compliance at Binance. They were held for several weeks but Nadeem fled from custody.
Following the Federal Government’s ban on cryptocurrency channels as part of a campaign against currency speculation, the Binance executives visited Nigeria for a meeting.
The Naira has experienced a significant devaluation of its currency, with the local currency losing 70% of its value against the dollar since the foreign exchange reforms were implemented last year, a situation worsened by a shortage of dollars locally.
An official of the Security and Exchange Commission (SEC) had also accused the Binance Naira P2P feature on its platform of destabilizing the country’s exchange rate.
Meanwhile, Binance spokesperson, Ivy Shirinda, told Nairametrics by mail that “we are deeply disappointed that Tigran Gambaryan, who has no decision-making power in the company, continues to be detained.
Tigran has been dedicated to public service and fighting crime for most of his life. These charges against him are completely meritless.
He should be freed while discussions continue between Binance and Nigerian government officials.
(Nairametrics)
