Flutterwave in money laundering, card fraud controversy

Nigerian startup, Flutterwave Payment Technology has denied the N4 million laundering allegation and alleged card fraud leveled against it by the Kenyan authority, Asset Recovery Agency (ARA).

The company led by Olugbenga Agboola, is said to be operating a payment service without Central Bank of Kenya license, which is against the payment system act in the country.

It was gathered that Flutterwave concealed the nature and source of billions of Kenyan shillings (Kenyan currency) entering its account, and also hid the movement of the funds, which are in USD, British Pound Sterling, EURO and Kenya shillings.

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Kenyan authorities said they began to probe the accounts in April, and discovered the unicorn tech firm hid behind offering a merchant platform for trades, however, upon receiving the funds, merchants were not paid.

“If indeed the Flutterwave was providing merchant services, there was no evidence of retail transactions from customers paying for goods and services. Further, there is no evidence of settlements to the alleged merchants“, the authority said.

The firm was also connected to alleged card fraud, with Flutterwave said to have received 185 online card payments in May 2021, with all the cards sharing similar identification numbers, which were issued by the same bank in one day.

However, in a statement, Flutterwave said it has records to explain the movement of funds in the company’s accounts, stating that it works in compliance with regulatory rules.

The firm said its operation was constantly audited by one of the big four auditing firms, and there’s an Anti-money laundering policy in place to safeguard the platform.

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Flutterwave described the claims that funds in the accounts were not tied to merchant transactions as false, stating that its platform facilitates merchant and corporate entity trades.

“We are a financial technology company that maintains the highest regulatory standards in our operations. Our Anti-money laundering (AML) practices and operations are regularly audited by one of the Big four firms. We remain proactive in our engagements with regulatory bodies to continue to stay compliant”, the company said.

“By facilitating payments for the biggest organizations in the world and everyday businesses, we process significantly large volumes of money and contribute to growing the economy in Kenya, and the rest of Africa.

“We are working to ascertain the motive behind the false claims, and have the records straightened”, the statement reads.