Court to begin Binance tax evasion trial on October 11

A Federal High Court sitting in Nigeria’s capital city, Abuja has declared that it will begin the tax evasion trial against global cryptocurrency exchange, Binance on October 11. Judge Emeka Nwite made the declaration today after hearing a non-guilty plea from the representative of the crypto company, Ayodele Omotilewa, today.

Binance faces four counts of tax evasion, including failure to register with Nigeria’s Federal Inland Revenue Service for tax purposes.

Recall that the Federal High Court in Abuja dropped charges against two executives of the crypto exchange, Tigran Gambaryan and Nadeem Anjarwalla from the FIRS tax evasion case against the company.

The court made the ruling following an amended charges application filed by the Federal Inland Revenue Service (FIRS) in response to a notice from Binance that it has appointed a Nigerian representative in the case, Ayodele Omotilewa.

At the resumed proceedings today, counsel for Binance, Tonye Krukrubo (SAN) told presiding Justice Emeka Nwite that Binance has forwarded the name of its official representative in the case to the FIRS and the court.  Counsel for the FIRS, Moses Idehu, confirmed the notice and asked the court’s permission to substitute all the previous charges with the fresh amended one.

In FIRS’ fresh application, Binance was listed as the sole defendant in the case, implying Gambaryan and Nadeem are no longer associated with its case.

Following that, Binance was accused of enabling 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) from the transactions in an amended charge by the Nigerian government representatives.

“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)”, the document reads.

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Nigeria vs Binance: A Backstory

Nigeria has blamed Binance for its currency woes after cryptocurrency websites became the platforms of choice for trading the Nigerian naira as the country struggled with chronic dollar shortages and its currency fell to a record low.

Nadeem Anjarwalla, a British Kenyan, a regional manager for Africa was detained alongside Tigran Gambaryan, a U.S. citizen and Binance’s head of financial crime compliance. were charged to court by Nigeria’s tax agency, the Federal Inland Revenue Service (FIRS) on the charges of tax evasion.

The two Binance executives were said to have been detained at a “comfortable guest house” and allowed many privileges despite being under arrest. These privileges include the use of telephones, and Mr Anjarwalla is believed to have exploited that privilege to plan his escape.

Following their arrest in February, the Nigerian authorities filed criminal charges against the two Binance executives,  Tigran Gambaryan, before a Magistrate Court in Abuja. The court granted the Economic and Financial Crimes Commission (EFCC) an order to remand them for 14 days. The court also ordered Binance to provide the Nigerian government with information on Nigerians trading on its platform.

Following Binance’s refusal to comply with the order, a Nigerian court extended the remand of the officials for an additional 14 days to prevent them from tampering with evidence. The court then adjourned the case till 4 April 2024.

A few weeks after, 38-year-old Nadeem reportedly escaped from custody.

The incident allegedly occurred after guards on duty led him to a nearby mosque for prayers in the spirit of the ongoing Ramadan fast. After prayers, it was discovered that Mr Anjarwalla had escaped.  He is believed to have flown out of the country using a Middle East airliner.

There were reports of efforts by the Nigerian authorities to repatriate Najeem to the country, in partnership with the Kenyan authorities. While Binance CEO, Richard Teng initially claimed it was working closely with the Nigerian government to resolve the situation, he would later announce that the Nigerian authorities were demanding a hefty bribe from its detained executives to make the money laundering trial initiated against them go away.