The crux of this legal battle revolves around the validity of service of court documents, a procedural matter that has taken center stage in a larger, high-stakes lawsuit. The Federal Inland Revenue Service (FIRS) of Nigeria has accused Binance Holdings Limited, a global cryptocurrency exchange, and two of its officials of conducting unregulated crypto operations within the country, resulting in alleged economic losses of a staggering $79.5 billion. Having obtained court approval for substituted service – a method used when conventional service proves difficult – the FIRS served the legal documents via email to Eleanor Hughes, Binance’s General Counsel. Binance, however, contests the legitimacy of this service, arguing that it fails to meet the required legal standards. This procedural dispute has stalled the substantive $79.5 billion lawsuit, highlighting the complexities of legal proceedings in the burgeoning and often opaque world of cryptocurrency.
The FIRS contends that its method of service was entirely proper, citing Hughes’s position as General Counsel and her previous use of the email address for official communication with the Nigerian government, including authorizing legal representation for Binance in a separate investigation. The agency highlights a specific instance where Hughes authorized the Nigerian law firm Aluko & Oyebode to represent Binance in an investigation by the Economic and Financial Crimes Commission (EFCC) concerning the company’s activities in Nigeria, using the same email address. This prior authorization, the FIRS argues, demonstrates Hughes’s authority to receive legal documents on behalf of Binance and validates the substituted service. Furthermore, the FIRS casts doubt on Binance’s claimed Cayman Islands residency, alleging a lack of supporting documentation and pointing to the company’s significant operational presence in Nigeria.
Binance, on the other hand, maintains that the order for substituted service was improperly granted and does not satisfy legal requirements. The company’s argument centers on the assertion that the substituted service did not adhere to established legal protocols and was thus invalid. The details of Binance’s specific objections remain somewhat unclear, other than the broad claim of impropriety. This lack of detailed public information regarding Binance’s specific arguments might be strategic, pending the court’s determination on the matter. The legal threshold for substituted service typically involves demonstrating diligent but unsuccessful attempts at conventional service and providing evidence that the chosen alternative method is reasonably likely to reach the defendant. The court’s decision will likely hinge on whether the FIRS adequately met these thresholds.
Adding another layer of complexity to the case is the involvement of Tigran Gambaryan, one of the Binance officials named in the lawsuit. While the details surrounding his involvement in the alleged unregulated crypto operations remain undisclosed, FIRS’s attempt to serve him while he was detained at Kuje Correctional Centre presents an intriguing subplot. The fact that Gambaryan directed the FIRS to Aluko & Oyebode, who subsequently declined service due to a lack of formal briefing, raises questions about the internal communication and legal strategy within Binance. The FIRS interprets Aluko & Oyebode’s involvement, despite their declining service, as further evidence of Binance’s awareness of the lawsuit. This episode highlights the intricate web of relationships and communications involved in this legal battle.
The FIRS further argues that, despite its objections to the method of service, Binance is demonstrably aware of the lawsuit and has already taken steps to engage legal representation. The agency emphasizes that lawyers appeared in court on behalf of Binance, suggesting that the company is actively participating in the proceedings despite its claims of improper service. This argument seeks to undermine Binance’s procedural objections by demonstrating that the fundamental purpose of service – to inform the defendant of the legal proceedings and allow them to respond – has been achieved. The FIRS contends that Binance has not demonstrated any prejudice or miscarriage of justice resulting from the substituted service, emphasizing that the company’s awareness of the lawsuit negates any potential harm.
The case is now in the hands of Justice Inyang Ekwo of the Federal High Court in Abuja, who has adjourned the matter to May 12 for a hearing on Binance’s application to set aside the substituted service order. The judge’s decision on this procedural point will have significant implications for the future of the $79.5 billion lawsuit. If the court upholds the substituted service, the substantive lawsuit against Binance will proceed. However, if the court sides with Binance and invalidates the service, the FIRS will be forced to restart the service process, potentially delaying the main proceedings significantly. This procedural wrangling underscores the challenges of navigating international legal jurisdictions and the intricacies of serving court documents on global entities, particularly within the rapidly evolving landscape of cryptocurrency.
