Contrary to several media reports, Flutterwave's Head of Branding and Storytelling, Yewande Akomolafe-Kalu says the account freeze was a civil case procedural step and nothing more.
On Wednesday, June 14th, some media houses reported that a Nairobi court has frozen 45 Flutterwave owned bank accounts and 10 mobile money wallets. According to BusinessdailyAfrica, who first reported the incidence, Flutterwave was alleged to have been involved in a pyramid scheme which had stolen more than $400 million (Sh55 billion) from Nigerians.
Recall that in May 2022, an online gambling company, 86fb/86z alleged that "[Flutterwave] maliciously froze [its] funds and intends to take the funds as their own and extort [the company] by cooperating with the local police."
Flutterwave denied the allegations stating that "some merchants were passing transactions on behalf of 86FB/86Z…without approval or authorisation." According to the fintech, the merchants involved were suspended from using the platform and all funds due to these merchants were settled.
It’s on the back of this event that more than 2,468 Nigerian nationals who were defrauded and are trying to recover their funds sued Flutterwave and more than six other companies in Nairobi, Kenya.
Amidst these claims, Yewande Akomolafe-Kalu, Flutterwave’s Head of Branding and Storytelling said in a statement seen by Benjamindada.com, “We do confirm that some of their accounts have been frozen by the High Court in Nairobi for 14 days.” However, she noted that it is only a procedural step of a civil case and nothing more.”
Flutterwave’s Head of Branding and Storytelling argued that it is a calculated effort to foil the operations of the fintech company. “We are of the view that the article(s) intentionally sensationalizes the matter and seeks to cast doubt on our operations.
In the African unicorn’s defense, Akomolafe-Kalu said, “Important to note is that last year, during our routine Know Your Customer (KYC) checks, we noticed that a few companies were using our platform to process payments for a company named 86FB/86Z. We identified that some direct merchants of Flutterwave were processing transactions on our platform for 86FB/86Z without our approval or authorisation to do so.
As a result, we notified the merchants to cease processing, settled all due funds and suspended their use of the Flutterwave platform. In addition to this, the case was reported to the appropriate regulatory and law enforcement bodies in Nigeria.”
In recent years, Flutterwave has been battling a lot of risk, fraud and compliance issues in Nigeria and Kenya. Earlier this year, the Kenyan Assets Recovery Agency withdrew its money laundering allegations against Flutterwave, thereby releasing the KSh6.6 billion (~$51 million) that was frozen in the company's account in 2022.
- This is a developing story, it will be updated with more details.