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The legal standoff between the Nigerian government and Binance, the world’s leading crypto exchange, has escalated as a court hearing on tax evasion has been postponed, raising concerns about regulatory pressures on cryptocurrency platforms in Nigeria.
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Nigeria’s Federal Inland Revenue Service (FIRS) claims Binance owes approximately $2 billion in taxes and seeks $79.5 billion in damages, arguing that the exchange’s operations have severely impacted the naira’s value.
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“From shutting down naira transactions to a shocking $81.5 billion lawsuit, Binance’s clash with Nigeria has been nothing short of dramatic,” Business Insider Africa reported.
Binance’s legal challenges in Nigeria highlight the complex interactions between cryptocurrency regulation and economic stability, with the exchange facing claims of $2 billion in taxes and $79.5 billion in damages.
Binance Faces Legal Battle in Nigeria Amid Soaring Inflation
The ongoing legal issues began when the FIRS filed a lawsuit in February 2025, accusing Binance of failing to comply with Nigerian tax laws. According to Reuters, Binance’s attorney, Chukwuka Ikwuazom, has contested the legitimacy of the FIRS’s service methods. He stated that Binance is registered in the Cayman Islands and, as such, cannot be subjected to Nigerian court processes validly serving documentation outside the country.
To substantiate this claim, Ikwuazom presented arguments that highlight the lack of Binance’s physical presence in Nigeria, asserting that legal documents should not be served via email without the court’s permission, a move he deems a violation of legal protocols. The court’s adjournment of the hearing allows for a reassessment of these procedural matters.
Nigerian Authorities Claim Significant Economic Damage
The FIRS asserts that Binance owes around $2 billion in unpaid taxes linked to its operations from 2022 to 2023. In addition to the tax demand, the agency has filed for $79.5 billion in compensation, alleging significant economic harm that has exacerbated the devaluation of the naira and contributed negatively to financial stability in Nigeria.
The allegations point to Binance’s substantial economic activity in Nigeria, which, according to the FIRS, necessitates compliance with local tax laws despite the exchange’s lack of a physical office. Furthermore, two senior Binance employees were detained in early 2024 on charges related to tax fraud and money laundering, showcasing the depth of the legal challenges facing the exchange.
Impact on Nigeria’s Cryptocurrency Landscape
In response to the mounting legal pressures, Binance suspended all naira transactions in March 2024, a decision indicating its intent to withdraw from the Nigerian market completely. This withdrawal aligns with the government’s stringent measures against cryptocurrency platforms, which it blames for disrupting foreign exchange markets and aggravating the naira’s decline.
The ramifications of these developments are significant as they illustrate the contentious relationship between regulatory authorities and cryptocurrency exchanges in Nigeria. The crackdown on Binance and similar platforms reflects broader economic instability and the Nigerian government’s efforts to regain control over its currency and financial systems.
“As economic instability grows, many Nigerians have turned to cryptocurrency as a hedge against inflation and currency devaluation,” noted blockchain analytics firm Chainalysis. In 2024, Nigerians traded approximately $59 billion worth of crypto assets, indicating a strong demand for digital currencies as alternatives in the face of traditional financial system limitations.
Average Growth of Total Cryptocurrency Value in Nigeria
Conclusion
The unfolding legal battle between Binance and the Nigerian authorities underscores the complexities of cryptocurrency regulation in emerging markets. As the government seeks to enforce tax obligations and maintain economic stability, Binance’s response and the outcome of the pending litigation will likely have lasting implications for the cryptocurrency landscape in Nigeria. The situation remains fluid, with the potential for significant changes in how cryptocurrencies operate within the country.
