Binance: $81B Tax Lawsuit In Nigeria, USD Services Restored In US

Binance is making headlines as it faces more regulatory hurdles ahead of new developments.

New developments show that authorities in Nigeria have filed a lawsuit against the firm.

Meanwhile, Binance.US has fought and won back access to U.S. dollar deposits and withdrawals.

Nigeria Sues Binance For Tax Evasion, Economic Losses

Nigeria is suing Binance for $81.5 billion in unpaid taxes and consequential economic losses.

Court documents show that the Federal Inland Revenue Service (FIRS) is after $79.5 billion for the alleged economic losses associated with the exchange’s activities, plus an additional $2 billion in back taxes.

It has followed a wider crackdown on cryptocurrency trading in Nigeria, to which the authorities have blamed Binance for fueling currency devaluation and financial instability.

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The charges also include failure to file tax returns, nonpayment of value-added tax (VAT), and corporate income tax.

Nigerian regulators have also allegedly accused Binance of being directly complicit in its users’ tax evasion.

However, since March 2023, Binance has already ceased all local naira transactions after getting the government’s attention.

For 2022 and 2023, the FIRS also makes a 26.75% demand on unpaid taxes against the Central Bank of Nigeria’s Lending rate and a 10 percent penalty for unpaid taxes.

Is the Exchange Responsible for Economic Losses In Nigeria

The lawsuit also alleges that Binance has a ‘’significant economic presence’’ in Nigeria and should, therefore, be liable for corporate income tax.

Nigeria’s Economic and Financial Crimes Commission (EFCC) has separately charged the company with money laundering, but the company has denied the charges.

It describes its relationship with the Nigerian national tax authorities as ‘very good.’

Binance’s involvement in Nigeria is part of the government’s efforts to regulate the cryptocurrency industry.

Citizens of the country have further realized the benefits of trading digital assets as a hedge against inflation and naira depreciation.

According to the Nigerian authorities, the Binance platform has facilitated capital flight and speculative trading.

According to them, this worsens currency fluctuations and economic instability.

If this case goes ahead, it will have repercussions on cryptocurrency regulation in Nigeria.

Authorities in the country promised more legal actions against other crypto platforms but declared a commitment to enforce tax compliance in the sector.

US Restores USD Trading Pairs After Regulatory Struggles

As it battles legal challenges in Nigeria, its U.S. affiliate Binance.US brought back U.S. dollar deposit and withdrawal services.

This is a step up from July 2023, when the exchange began operating as a crypto-only platform.

Now, users can deposit and withdraw USD through bank transfers (ACH) with no fees.

After months of regulatory difficulties, Binance US saw reinstatement of fiat services. The SEC has dragged Binance.US through regulatory hurdles since the FTX collapse.

Due to regulatory restrictions on fiat transactions, the exchange lost billions of trading volume and had to lay off 70 percent of its staff.

Binance.US Chief Operating Officer Christopher Blodgett said the exchange has secured multiple banking partners for fiat transactions.

Nevertheless, he admitted that Binance US no longer operated in the market.

Still, he shared that during this period, the company had managed to smooth out its operations and was confident it would regain its place in the US crypto market.

Ten USD trading pairs, including BTC/USD and ETH/USD, are back in form, as more will go live tomorrow.

While Binance US is associated with Binance’s global operations, it is a separate firm subject to regulations in the U.S.

Nevertheless, the regulatory pressure on the firm greatly impaired its market position.

Despite the setbacks, Binance US has the opportunity to return with a focus on Fiat services.