In the suit filed in February, Nigeria said it wants Binance to pay $79.5 billion for economic losses it says were caused by Binance’s operations in the country, as well as $2 billion in back taxes.
The fine has drawn comparisons to Nigeria’s previous punitive actions against telecom giant MTN: The South African telecom giant was handed a $5.2 billion fine in 2015 for failing to disconnect unregistered SIM cards in 2015. Nigerian authorities said unregistered SIM cards were used by criminal gangs and jihadist group Boko Haram to avoid being traced. Nigeria later accepted a reduced sum of about $1.5 billion. In 2023, MTN’s Nigerian subsidiary was ordered to pay $72.6 million over a tax dispute.
The Binance lawsuit, coupled with Gambaryan’s account of his time in detention, has brought Nigeria’s investor-friendliness under scrutiny. “The Nigerian government has developed a habit of imposing hefty fines on companies over infractions,” according to Lagos-based publication Business Hallmark.
Idris said the government was “working to remove bottlenecks for investors” by rolling out measures to improve the ease of doing business including a review of visa rules, tax laws, and expatriate worker quotas. Foreign direct investment inflows to Nigeria have declined in recent years, falling to $1.6 billion in 2023 from $8.1 billion in 2009, according to World Bank data. The high cost of doing business is a factor in the decline, say analysts.
Idris denied that Binance was being held responsible for the devaluation of the naira, which was driven by factors including the government’s decision to float the currency in 2023. He maintained that the charges against Binance focused on tax evasion and money laundering, although, he said, “Binance contributed” to the currency’s devaluation.