Crypto Exchange Stalled in Nigerian Tax Trial

A Nigerian court has postponed the tax evasion trial involving cryptocurrency giant Binance until May 17th. This delay stems from a procedural hurdle: Binance has not been formally served with the charges. The Nigerian Federal Inland Revenue Service (FIRS) filed the lawsuit in March 2024, accusing Binance of four counts of tax evasion. These charges include failing to register with the FIRS, neglecting to file tax returns, and not remitting Value-Added Tax (VAT) and Company Income Tax. The FIRS further alleges that Binance's platform facilitates customer tax evasion.

During the initial court appearance on April 19th, representatives for Binance were absent. Tigran Gambaryan, a U.S. citizen and head of financial crime compliance at Binance, was present but did not enter a plea. His lawyer argued that Gambaryan could not represent the company until Binance itself had been served with the lawsuit. The presiding judge, Emeka Nwite, agreed and adjourned the proceedings until May 17th, when he will rule on the service issue.

This legal roadblock adds another layer of complexity to Binance's situation in Nigeria. The company is also facing money laundering charges from the Economic and Financial Crimes Commission (EFCC), Nigeria's anti-graft agency. Those charges, unrelated to the tax case, allege that Binance laundered over $35 million. The EFCC trial is set to resume on May 2nd.

Binance has maintained its innocence throughout these legal challenges. In a statement released in March, the company said it was "working closely with the authorities" in Nigeria. The company has not yet commented on the delay in the tax trial.

The outcome of these cases in Nigeria will be closely watched by regulators and cryptocurrency exchanges around the world. Nigeria is a major market for cryptocurrency, and its approach to regulating the industry could set a precedent for other countries. If Binance is found guilty of tax evasion or money laundering, it could face significant financial penalties and potentially even restrictions on its operations in Nigeria. The cases could also have a broader impact on the cryptocurrency industry, as they raise questions about the taxation and regulation of digital assets.

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