In a significant development, the Federal High Court in Nigeria has discharged Tigran Gambaryan and Nadeem Anjarwalla from the FIRS tax evasion case against Binance. This decision follows the appointment of a Nigerian representative for Binance, Ayodele Omotilewa, leading to a pivotal shift in the legal proceedings.
Key Court Decisions
The court decided after Binance and the Federal Inland Revenue Service (FIRS) confirmed Omotilewa’s appointment. As a result, the court struck out the charges against Gambaryan and Nadeem, focusing solely on Binance in the newly filed charges by the FIRS. This adjustment aligns with the FIRS’s allegations of Binance failing to collect and remit taxes, including VAT and Company Income Tax (CIT), from its Nigerian operations.
Background of the Binance Case
Previously, on March 22, 2024, FIRS initiated legal proceedings against Binance and Gambaryan for tax evasion. By May 17, 2024, the FIRS amended its lawsuit, asserting that Binance did not collect and remit essential taxes, violating Section 40 of the FIRS Establishment Act 2007 as amended. Notably, Nigeria’s Information Minister, Idris Mohammed, highlighted Binance’s substantial turnover of over $20 billion in Nigeria in 2023.
Court Proceedings and Rulings
At the latest hearing, Binance’s counsel, Tonye Krukrubo SAN, informed Justice Emeka Nwite about the appointment of Omotilewa as Binance’s official representative. The FIRS’s counsel, Moses Idehu, confirmed this and requested the substitution of previous charges with the fresh ones dated June 13, 2024. Binance now stands as the sole defendant in this amended charge, excluding Gambaryan and Nadeem from the case.
The FIRS’s fresh charge accuses Binance of providing services to Nigerians without deducting the required Value Added Taxes (VAT). Idehu urged the court to direct Omotilewa to enter the dock and take his plea on behalf of Binance. However, Krukrubo’s legal team argued against this, stating that Nigerian law does not require a company representative to stand in the dock or take a plea.
Ultimately, the court discharged Gambaryan and Nadeem from the FIRS case, striking out the previous charges and names. The judge adjourned the case to July 12 for a plea, requesting both parties to file written arguments on whether the Nigerian representative should stand in the dock.
Broader Implications and Ongoing Cases
While Gambaryan and Nadeem are currently free from the FIRS case, they remain defendants in a separate case filed by the Economic and Financial Crimes Commission (EFCC). This case involves allegations of money laundering and foreign exchange violations. Nigerian authorities detained Gambaryan and Anjarwalla on February 28, 2024, with Anjarwalla subsequently fleeing from custody.
The Nigerian government’s crackdown on cryptocurrency channels and the resulting impact on the Naira’s devaluation underscore the country’s broader economic and regulatory challenges. A Security and Exchange Commission (SEC) official also accused Binance’s Naira P2P feature of destabilizing the exchange rate.
Binance’s Response
Binance’s spokesperson, Ivy Shirinda, expresses disappointment over Gambaryan’s detention, stating, “We are deeply disappointed that Tigran Gambaryan, who has no decision-making power in the company, continues to be detained. Tigran has been dedicated to public service and fighting crime for most of his life. These charges against him are completely meritless. He should be freed while discussions continue between Binance and Nigerian government officials.”
This ongoing legal saga highlights the complexities of cryptocurrency regulation in Nigeria and sets a precedent for future modus operandi of such cases.
For more detailed information on this case, you can follow updates from Nairametrics.
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