Tax evasion: Court discharges Binance executives

The Federal High Court on Friday, discharged Tigran Gambaryan, a 39-year-old American, and fleeing Nadeem Anjarwalla from the Federal Inland Revenue Service (FIRS) tax evasion case against the cryptocurrency exchange platform, Binance.

The trial Judge, Justice Emeka Nwite held in a short ruling after a fresh amended charges were filed by the FIRS in view of a notice from Binance about its appointment of a Nigerian representative by the name of Ayodele Omotilewa.

The FIRS had on March 22, 2024, filed a suit against the cryptocurrency exchange platform Gambaryan, and Nadeem over alleged tax evasion.

On May 17, 2024, the FIRS  amended its suit, alleging that Binance and Gambaryan allegedly failed to collect and remit various categories of taxes to the federation, particularly the Value Added Tax (VAT) and  Company Income tax (CIT), as stipulated by Section 40 of the FIRS Establishment Act 2007 as amended.

Following the agreement by the legal team on both sides, Justice Nwite further adjourned till June 14 for arraignment of Binance and Gambaryan.

When the matter was called on Friday, counsel for Binance, T.J. Krukrubo (SAN) told the court that his client has forwarded the name of its official representative to the FIRS and to the court.

Counsel for the FIRS, Moses Idehu, confirmed the same and asked the court’s permission to substitute all the previous charges with the fresh amended one dated June 13, 2024.

He told the court that the FIRS has “discontinued” its case against Gambaryan and Nadeem.

In FIRS’ fresh charge, Binance is now listed as the sole defendant implying Gambaryan and Nadeem are no longer associated with its case.

In the charge, the Binance trading platform was accused of offering services (in the buying and selling of cryptocurrencies and in the remittance and transfer of those assets) to Nigerians while failing to deduct the necessary Value Added Taxes(VAT), arising from its operations.

Count four of the charge reads, “That you Binance Holdings Ltd on or about the 1st February, 2024, in Abuja, FCT within the Jurisdiction of this Honourable Court, whilst involved in the offering of services to subscribers on your trading platform, known as Binance did aid and abet those subscribers on your trading platform to unlawfully refuse to pay taxes, or neglect to pay those taxes and in so doing committed an offence contrary to and punishable under the provisions of Section 94 of the Companies Income Tax Act (as amended)”.

However, Idehu urged the court to direct that the Binance representative from Nigeria should enter the dock and take his plea on behalf of the corporation he represents.

Krukrubo and Gambaryan’s legal team contended that Nigerian law does not mandate a representative of a company that is sued to stand inside a dock and take a plea.

They argued that a representative of a company that is sued may not need to attend proceedings and can even write a letter to the court in respect of the company’s position on a matter.

The defense urged the court to discharge Gambaryan and Nadeem from the FIRS case since a representative has been officially sent to the proceedings.

The FIRS also confirmed that the matter is now between federal government and Binance.

Justice Nwite said parties should file a written address on the issue of whether the representative of Binance should be in the dock so he can rule on it and held that the “charges filed on March 22, 2024, and May 17, 2024, are hereby struck out.”

The judge also struck out the names of Gambaryan and Nadeem from the case and adjourned the case is adjourned till July 12, 2024, for the Defendants to take their plea.

He added that the lawyers to the parties should file processes on whether the Nigerian representative should be in the dock or not.

The Federal Government had accused the cryptocurrency exchange of influencing foreign exchange (FX) rates, resulting in stricter oversight of crypto trading platforms.

The EFCC is separately prosecuting Binance and its executives over alleged money laundering and foreign exchange contravention.

On February 28, 2024, Nigerian authorities detained two senior Binance executives: Nadeem Anjarwalla, a 37-year-old British-Kenyan, who serves as the regional manager for Africa, and Tigran Gambaryan, a 39-year-old American, who is the head of financial crime compliance at Binance.

They were held for several weeks but Nadeem fled from custody.

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Source:

Tribune Online