Inside the Flutterwave scandal

June 18, 2023

Table of Contents

Flutterwave scandal

Months after the revelation of the mismanagement, and serious administrative and sexual harassment, it rocked the Nigerian fintech unicorn Flutterwave. It is the company that has founded itself at the center of the Kenyan investigation into fraud and money laundering.

ARA (Assets Recovery Agency) has launched an investigation into transactions that are made by at least 10 firms. It also froze the bank accounts that are linked to the Flutterwave which ARA officials believe to do money laundering. The amounts of funds that were alleged by the ARA that have been labeled and laundered as suspicious through the associated companies and the flutterwave that is over $200 million.

Flutterwave fraud allegations

As the details provided by the flutterwave, it was the part of many scandals that includes ARA’s allegation. It was started when the fintech bank accounts had many suspicious activities where funds are received from the foreign entities which decide to raise. As advised by the regulators the funds were then transferred to the related accounts instead of the merchant’s settlements.

ARA said that flutterwave was operating the payment service platform without being authorized and the CBK (Central Bank of Kenya) confirmed this allegation in July 2022 when the government stated that the company is not licensed to operate the payment service provider in Kenya. Within that time the CBK officials of the financial department in the reign desist and cease from dealing with flutterwave.

After these all fraud allegations flutterwave stated that ARA claims regarding the financial improprieties were not true and media reports at that time that the allegations were against the flutterwave with Nigerian based fintech were politically motivated because this happened near the elections time in Kenya.

Flutterwave denied the allegations

Flutterwave has denied the allegation. In the statement the company later claimed that the reports on the money laundering were all false and it was targeted as a disinformation campaign. It was said that the flutterwave scandal was recorded to verify the identified transactions by the ARA. All over the world people contacted the company many times for the records. Flutterwave has gone through the requests but they did not provide further information as of press time.

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Flutterwave plans for the future

Having been valued at USD 3 billion in the last rounding, flutterwave had plans for an IPO and they followed all scandals and regulatory issues that were related to the harassment allegation and insider trading. Since then the company had changes for the technologies, finances, and people’s operations who believed in preventing further escalation of the past scandals that were reported by Benjamin dada.

Moreover, it was stated that the company had belief that public market investors will value the position, customer base and growth at the premium to the private funding valuations. It is all set to keep the funding operations through the private capital and cash capital. The company was reported in Jan 2023 and it has plans for the United Kingdom based fintech Railsr.

What happened so far in the flutterwave scandal?

Funds were released after the first case closed but bad luck flutterwave’ s accounts are still frozen. The court released the funds that belong to the flutterwave and it is accused after the ARA who withdrew the application against all of them on 27 Feb this year that brings the first case to an end. The funds released came after the Kenya court in Feb and the application by many Nigerians were thrown out who were the part of the frozen funds that were separated in the event.

The individual then sought and recovered funds they had invested and lost the sports betting platform. They claim the false trading and investment scheme that allows flutterwave to process the payments.

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Conclusion

ARA (Assets Recovery Agency) frozen the bank accounts that are linked to the Flutterwave which ARA officials believe to be money laundering. All fraud allegations flutterwave stated that ARA claims regarding the financial improprieties were not true and media reports at that time that the allegations against the flutterwave with Nigerian based fintech were politically motivated because this happened near the elections time in Kenya.

Flutterwave has denied the allegation and claimed that the reports on the money laundering are all false and it was targeted as the disinformation campaign.