Nigeria Sues Binance for $79.5B, Tightens Crypto Regulations

• Nigeria sues Binance for $79.5B, blaming it for naira instability and tax evasion, while tightening crypto regulations.
• Lawmakers propose taxing crypto transactions, and the SEC expands oversight to licensed exchanges to boost compliance.
• Binance denies allegations but faces mounting legal pressure, with Nigeria aiming to set a precedent for crypto taxation.

Nigeria has escalated its crackdown on Binance, seeking $79.5 billion in damages and $2 billion in back taxes. Authorities have arrested two officials from Binance and blame the company for the volatility of the naira. The nation is also updating its Bitcoin laws to incorporate digital assets into its tax structure.

A bill to impose taxes on cryptocurrency transactions is being reviewed by lawmakers. By granting licenses to more exchanges, the Nigerian SEC is improving oversight. The goal of this action is to stabilize the economy and provide income. Binance, which is already being prosecuted for money laundering and tax violations, disputes the claims.

Nigeria Seeks Billions in Binance Lawsuit

Nigeria’s Federal Inland Revenue Service (FIRS) has filed a lawsuit against Binance, demanding $79.5 billion in economic damages. Authorities claim the exchange’s operations have severely impacted the local economy. They also seek $2 billion in back taxes for 2022 and 2023.

Moreover, the FIRS alleges that Binance has an economic presence in Nigeria. Hence, it must pay corporate income tax. The lawsuit also demands a 10% penalty on unpaid taxes. Additionally, authorities want a 26.75% interest rate applied, aligning with the Central Bank of Nigeria’s lending rate.

Crypto Regulation Tightens Amid Economic Struggles

The Nigerian government is revising cryptocurrency regulations to boost tax revenue. Besides tackling Binance, lawmakers are considering taxing digital asset transactions on regulated platforms. If passed, the law will take effect in early 2025.

Furthermore, Nigeria has already imposed a 7.5% VAT on crypto transactions. Some exchanges, including KuCoin, have complied by adjusting their fees. Consequently, authorities expect crypto taxation to provide a crucial revenue stream.

SEC Expands Oversight to Licensed Crypto Firms

The Nigerian SEC is increasing regulatory control over crypto exchanges. In August 2024, it issued its first official license to Quidax. Soon after, it announced plans to enforce actions against unregulated platforms.

Additionally, the SEC aims to create a transparent ecosystem for investors. Licensing exchanges will ensure compliance and facilitate taxable transactions. Moreover, structured oversight is expected to boost market confidence.

Binance Faces Multiple Charges

Besides tax evasion allegations, Binance is also dealing with money laundering charges. The company denies wrongdoing and argues it has worked with Nigerian authorities. However, regulators remain firm on holding the exchange accountable. The lawsuit marks a turning point for Nigeria’s crypto industry. If successful, it will set a precedent for taxation and compliance in the digital asset space.