Flutterwave has come out in a denial of fraud and money laundering charges brought against it by the Kenya Asset Recovery Agency, which investigates and recovers the proceeds of crime.
It comes after a total of $52.5 million in 62 accounts linked to Flutterwave and six other companies receiving wire transfers from fintech were blocked by the country’s highest court after the agency filed for them to be frozen.
In court documents seen by TechCrunch, the agency said it launched an investigation after suspicious activity and transactions at six companies were flagged on suspicion that they were criminally obtained. The agency also reported that the fintech was operating in Kenya without a valid license from the country’s monetary regulator, the Central Bank of Kenya (CBK).
Flutterwave says the accusations are false.
“Allegations of financial misconduct involving a company in Kenya are completely false and we have documents to prove it. We are a financial technology company that adheres to the highest regulatory standards in our operations. Our anti-money laundering practices and operations are regularly reviewed by one of the Big Four firms. We continue to actively engage with regulators to continue to comply,” Flutterwave told TechCrunch.
The ARA alleges that the funds in the Flutterwave accounts were received from specific foreign entities and transferred to specific accounts belonging to the six companies, and not as settlements with sellers.
It stated that Flutterwave’s bank accounts were used as conduits for money laundering under the guise of providing trading services, and that the fintech had no evidence of retail transactions from customers paying for goods and services. He added that there was no evidence of settlements with the alleged traders. The agency filed a lawsuit to confiscate the money in favor of the government.
“That 1st Defendant’s (Flutterwave) bank accounts received billions (millions of US dollars) as part of an alleged money laundering scheme, and the same was deposited into various bank accounts in an attempt to conceal or disguise the nature, source, location, disposition or movement of these funds,” the ARA said in a statement.
The ARA also stated that Flutterwave is suspected of card fraud because some “transactions were made using cards issued by the same bank at the same time on the same day, which raises suspicions of card fraud.”
But Flutterwave told TechCrunch that it processes payments for businesses around the world, most of which are in high volume. He said that he had records confirming these transactions. Flutterwave simplifies cross-border payment transactions for small and large businesses in Africa through a single API, and helps companies outside the continent expand their operations in Africa. His client list includes Booking.com, Flywire and Uber. The startup recently raised $250 million at a $3 billion valuation, making it one of Africa’s most valuable fintech companies.
“Through our financial institution partners, we collect and pay on behalf of merchants and businesses. In doing so, we earn commissions through transaction fees, the records of which are available and verifiable. As a business, we hold corporate funds to support our operations and provide services to all of our customers,” Flutterwave told TechCrunch.
“By facilitating payments for the world’s largest organizations and day-to-day businesses, we process significantly larger amounts of money and help grow the economy of Kenya and the rest of Africa,” it said in a statement.
Elivalat Fintech Ltd, Hupesi Solutions, Cruz Ride Auto Ltd and its director Simon Karanji Ngige, Boxtrip Travels and Tours, Bagtrip Travels Ltd and Adguru received funds from Flutterwave and whose accounts were also frozen. .
Fluttewave claimed a witch hunt, saying it was doing its own investigation to uncover the motive.
“Flutterwave has a responsibility to ensure the integrity of the ecosystem, and we are committed to continuing to work with all stakeholders to maintain this. We are working to clarify the motives behind the false claims and correct the records.”
Credit: techcrunch.com /