Binance asks Court to set aside Nigerian Government’s $81bn Substituted Suit Service
Binance Holdings Limited, a cryptocurrency exchange platform, has asked the Federal High Court in Abuja to set aside what it describes as the alleged “purported substituted service” of the Nigerian government’s $81 billion economic loss fine and unpaid income tax suit against it.
Chukwuka Ikwuazom SAN, counsel for Binance, made the request on Monday, in his motion, when he appeared before Justice Inyang Ekwo.
The Federal Government (FG), through the Federal Inland Revenue Service (FIRS), had asked the court to order Binance Holdings Limited to pay $79,514,055,594.40 and N231 million for economic losses allegedly caused by its operations in Nigeria, as well as $2,001,000,000 in income tax for 2022 and 2023. The government also claims a 10% penalty for non-payment of income tax and seeks a 26.75% annual interest rate, reflecting the prevailing Central Bank of Nigeria (CBN) lending rate.
According to the FIRS, the platform failed to register for tax compliance, which is contrary to Nigeria’s Companies Income Tax (CIT) Act, the Federal Inland Revenue Service (Establishment) Act 2007, the Central Bank of Nigeria (CBN) regulatory framework for mobile money services, and the CIT Significant Economy Presence (SEP) Order.
In an affidavit deposed to by Jimada Mohammed Yusuf, a member of the Special Investigation Team from the Office of the National Security Adviser, the federal government discovered that Binance had been operating in Nigeria for over six years without registration.
According to Yusuf, this was allegedly confirmed by two Binance executives, Tigran Gambaryan and Nadeem Anjarwalla, during a meeting with the Securities and Exchange Commission (SEC) in 2024.
He claimed that in a letter dated February 20, 2024, Binance admitted to having 386,256 active users from Nigeria on its platform, with a trading volume of $21.6 billion and a net revenue of $35.4 million for the calendar year 2023.
Recall that the Presiding Judge, Justice Inyang Ekwo, had on February 11 granted leave to FIRS to serve its originating summons and accompanying documents on the cryptocurrency firm through substituted means by sending the processes via email to the address: Eleanor-huges@binance.com.
At Monday’s proceedings, Binance’s lawyer, Chukwuka Ikwuazom, a Senior Advocate of Nigeria, informed the court about his motion filed praying the court to vacate the order of substituted service granted to the FIRS.
Ikwuazom argued that the court rules for such service had not been complied with before the court issued the order.
Earlier, counsel for the FIRS, Chief Kanu Agabi, a Senior Advocate of Nigeria, told the court that Binance served them with the motion seeking to vacate the order for substituted service on Monday morning.
Agabi, however, declared his readiness to respond to the application.
Justice Ekwo said the copy of the motion was not in the court file, and Ikwuazom, who apologised to the court, said the application was filed on Friday.
The judge subsequently adjourned the matter till April 30 to allow the FIRS to respond appropriately.
