Flutterwave denies money laundering, explains its role as a payment merchant
By Jeph Ajobaju, Chief Copy Editor
Flutterwave has denied money laundering even as it failed to win the argument in a court in Kenya which found it and some other fintechs guilty as charged and froze their bank accounts with millions of dollars.
Nigeria’s biggest fintech unicorn and one of the most respected tech startups in Africa insisted, despite the court verdict, that it is involved in a $59 million money laundering scam in Kenya.
Kenya’s Asset Recovery Agency (ARA) told the court that the accounts of Flutterwave received billions of shillings and the same was deposited in different banks to conceal the nature, source or movement of the funds.
“Investigations established that the bank accounts operations had suspicious activities where funds could be received from specific foreign entities which raised suspicion. The funds were then transferred to related accounts as opposed to settlement to merchants,” ARA said.
“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 court agreed with ARA.
In reaction to the judgment, Flutterwave issued a statement which outlined its payment system and how it earns fees across the continent.
“Claims of financial improprieties involving the company in Kenya are entirely false and are being circulated as part of a disinformation campaign.
“Flutterwave has been a target of deliberate false media reports and misrepresentations, the statement said.
“Through our financial institution partners, we collect and pay on behalf of merchants and corporate entities.
“In the process, we earn our fees through a transaction charge, records of which are available and can be verified. As a business, we hold corporate funds to support our operations and provide services to all our customers.
“By facilitating payments for the biggest organisations 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.”
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Compliance with regulations
Flutterwave also explained its role as a payment merchant in Kenya, saying it complies with regulations and its anti-money laundering practices are audited by a reputable firm – which it did not name.
“We are a financial technology company that maintains the highest regulatory standards in our operations,” it added in the statement, per The PUNCH.
“Our anti-money laundering 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.
“Flutterwave has a responsibility to ensure the integrity of the ecosystem, and we pledge our commitment to continue to work with all stakeholders to uphold this.
“We are working to figure out the motive behind the publication, and have the records straightened.”
