Flutterwave Exposed – CBK Slams Nigerian Fintech Amid Ksh6.2B Freeze

Flutterwave lacks the licenses to operate in Kenya, the Central Bank of Kenya (CBK) has stated. The declaration comes weeks after a Nairobi court froze more than Ksh6.2 billion spread in 62 bank accounts belonging to the Nigerian fintech and four Kenyans on allegations that the funds are proceeds of card fraud and money laundering.

Answering questions during the Monetary Policy Committee (MPC) briefing on Thursday, July 28, CBK Governor Patrick Njoroge stated that Flutterwave is not licensed either as a remittance provider or payments service provider in Kenya. In a statement issued on July 7 after the money laundering allegations surfaced, Flutterwave Kenya had vehemently dismissed all claims of impropriety stating ‘ [Flutterwave] maintains the highest regulatory standards in our operation’.

“Flutterwave is not licensed to operate as a remittance provider or payments service provider in Kenya. They are not licensed to operate and therefore, they should not be operating & I think Chipper Cash, we could also say the same,” Njoroge stated, roping in another major fintech – Chipper Cash – into the non-compliance boat.

Chipper Cash is a venture-capital-backed fintech offering free and instant Peer-to-peer Cross-border payments in Africa and Europe. The four-year old company is headquartered in San Francisco, California.

In a court filing, the Assets Recovery Authority (ARA) had argued that by allegedly providing a payment service platform without authorization from CBK, Flutterwave “was concealing the nature of [its] business.” The fintech became Africa’s most valuable startup in February 2022 when its valuation crossed $3 Billion (Ksh356.1 Billion).

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ARA alleged that the 62 bank accounts “were used as conduits for money launderings in the guise of providing merchant services,” and that the fintech had engaged in card fraud after one of the company’s bank accounts received 185 online payments with the same bank identification number and by “cards issued by the same bank, at the same point, on the same day.”

The body further stated that it found no evidence of retail transactions from real customers paying for goods and services or any proof of settlements to the alleged merchants.

The CBK position doesn’t bode well for the company which has been also looking to restore its reputation damaged in recent months by claims of sexual harassment and fraud.

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