A Nigerian court on Monday postponed a high-profile tax evasion case against Binance to April 30, as the crypto exchange challenges the legality behind how it was served court documents.
The delay gives tax authorities more time to respond to Binance’s request to cancel a court order that allowed documents to be sent by email, Reuters reported on Monday.
Binance’s legal counsel, Chukwuka Ikwuazom, said the Federal Inland Revenue Service (FIRS) did not get court approval to serve documents outside Nigeria. He argued that the Feb. 11 order allowing substituted service was invalid. Binance is registered in the Cayman Islands and does not have a physical office in Nigeria.
Consequently, the order for substituted service is “improper and should be set aside,” Ikwuazom said.
The legal challenge could complicate what is already one of the most significant cases in Nigeria’s crackdown on crypto platforms.
Nigeria Seeks $81.5B from Binance Over Tax and Market Disruption Claims
The Nigerian government filed the lawsuit in February, accusing Binance with tax evasion and economic disruption. Authorities are seeking $81.5b in total. This includes $2b in back taxes and $79.5b for alleged economic damages.
The FIRS alleges Binance’s peer-to-peer platform enabled unregulated trading. Further, it claims this activity worsened the depreciation of the naira. The currency has dropped over over 70% in value against the US dollar since 2023.
Government Cites Binance’s Local Activity in Push for Tax Compliance
With inflation approaching 30% in 2024, Nigerian officials have blamed unregulated crypto activity for weakening the country’s financial stability. Binance has been active in Nigeria since at least 2019. It reportedly processed more than $21.6b in transaction volume in 2023.
As a result, the FIRS says Binance has a significant economic presence in Nigeria. It argues the exchange should be held accountable under the Companies Income Tax Act. Therefore, the agency is asking the court to order Binance to pay corporate income taxes for 2022 and 2023. It is also seeking a 10% penalty on unpaid amounts and 26.75% interest based on the Central Bank of Nigeria’s lending rate.
The case marks one of the government’s most aggressive moves to rein in the influence of digital asset platforms.
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