An agency in Kenya charged with the tracing of and freezing proceeds from crime claimed that it received an order granting it authority to block bank accounts owned by Flutterwave, a Nigerian fintech. Flutterwave, according to the agency claims is involved in money laundering and not merchant services.
A deliberate attempt to obstruct the movement of funds
Kenya’s Asset Recovery Agency (ARA) recently received an order from the High Court to freeze bank accounts holding nearly $60 million which the agency believes to be laundered money, a report has said. One of the companies whose accounts were frozen was Flutterwave from Nigeria. This fintech startup had more than 50 accounts.
Star reported that ARA claimed to have received billions of shillings, which were later distributed to various accounts. This was part of a plan to obfuscate funds’ movement.
“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 stated.
Additionally, the agency alleges that Flutterwave is violating Kenya’s National Payment System laws, which forbid the provision of a payment service platform without the Central Bank of Kenya’s authorization. An ARA investigator, Isaac Nakitare, is reported to have obtained an order to search and inspect Flutterwave’s bank accounts on April 4.
We have no evidence that there were any retail transactions
After receiving the order, Nakitare reportedly found the fintech giant’s account with Guaranty Trust Bank had close to $45 million (5.3 billion Kenyan shillings) while the company’s bank account with Equity Bank had close to $12 million. According to the report, Flutterwave’s account at Ecobank held millions in local currency at the time of the inspection.
Apart from Flutterwave and Elivalat Fintech Limited and Boxtrip Travel and Tours Limited respectively, Bagtrip Travel Limited and Adguru Technology Limited as well as Cruz Ride and Hupesi Solutions were among the businesses whose accounts were frozen.
According to the ARA, most money transfers were made in smaller tranches than one million shillings. The ARA stated that this is often done by the transfer instigators trying to hide their identity.
The agency also insisted that, despite the claims that Flutterwave was providing merchant services, it found “no evidence of retail transactions from customers paying for goods and services.” It added that no evidence of “settlements to the alleged merchants” was found.
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