Africa’s leading fintech startup, Flutterwave, have come out to clarify that the recent account freeze involving the company was a civil case procedural step and not indicative of any wrongdoing as previously reported by some factions of the media.
On Wednesday, 14th of June, it was reported by several media outlets that a Nairobi court had frozen 45 bank accounts and 10 mobile money wallets owned by Flutterwave, alleging the company’s involvement in a pyramid scheme that defrauded Nigerians of over $400 million. The company’s Head of Branding and Storytelling, Yewande Akomolafe-Kalu, refuted these claims in a recent statement.
The allegations stemmed from a dispute with an online gambling company, 86fb/86z, which accused Flutterwave of freezing its funds and attempting to extort the company with the help of local police. Flutterwave, however, denied the allegations, stating that certain merchants had conducted unauthorized transactions on behalf of 86FB/86Z. The fintech company suspended these merchants and settled all funds owed to them.
As a result of these events, more than 2,468 Nigerian nationals, who were victims of the alleged fraud and seeking to recover their funds, filed a lawsuit against Flutterwave and other companies in Nairobi, Kenya.
Yewande Akomolafe-Kalu confirmed that some of Flutterwave’s accounts had been frozen by the High Court in Nairobi but emphasized that it was a procedural step in the ongoing civil case. She expressed the belief that the media reports were intentionally sensationalizing the matter to cast doubt on Flutterwave’s operations.
Yewande further explained that Flutterwave had discovered unauthorized use of its platform by certain merchants processing transactions for 86FB/86Z during routine Know Your Customer (KYC) checks. The company promptly notified the merchants to cease such transactions, settled all outstanding funds, and suspended their access to the Flutterwave platform. Additionally, the case was reported to relevant regulatory and law enforcement authorities in Nigeria.
Flutterwave has faced various risk, fraud, and compliance challenges in both Nigeria and Kenya in recent years. Earlier in the year, the Kenyan Assets Recovery Agency dropped money laundering allegations against Flutterwave, leading to the release of approximately KSh6.6 billion (~$51 million) previously frozen in the company’s account.