CBK sent a notice to all CEOs of banks and financial institutions advising them that they must not deal with Flutterwave (Niagara) and Chipper Cash (Niagara). The letter reiterates the CBK governor Patrick Njoroge and the Asset Recovery Agency (ARA)’s assertions that the two companies are not licensed to operate in Kenya.
Flutterwave and Chipper’s Clash With the CBK
CBK (Central Bank of Kenya) ordered banks in Kenya to stop dealings with Nigerian fintech companies Flutterwave and Chipper Cash. This order was issued just 24 hours after Patrick Njoroge the CBK governor had stated to journalists that both entities were not licensed for operation in Kenya.
Before the announcement by the CBK, a High Court in Kenya had ruled that Flutterwave’s bank accounts be frozen to make way for a probe into the fintech giant’s alleged illegal activities. The court ruling subsequently enabled Kenya’s Asset Recovery Agency (ARA) to block Flutterwave’s access to more than 50 bank accounts which reportedly hold nearly $60 million.
Bitcoin.com News previously reported that Flutterwave claims it isn’t providing merchant services, as claimed by the ARA. Instead, Flutterwave has been involved in money laundering. However, Flutterwave dismissed the allegations and claimed to “have the records to verify this.” The fintech unicorn, which raised $250 million earlier this year, also claimed it “maintains the highest regulatory standards in our operations.”
In addition, the fintech firm’s statement claimed its “anti-money laundering practices and operations are regularly audited by one of the Big Four firms.”
Financial Institution CEOs are told to confirm their compliance
While Flutterwave suggested in its statement that is working with the regulators, Njoroge’s remarks and the CBK’s subsequent letter to CEOs of Kenyan financial institutions dated July 29, reiterate ARA’s allegations that Flutterwave is engaged in “money remittance and payment services without licensing and authorization.”
Meanwhile, in addition to informing the heads of the Kenyan financial institutions about the two fintechs’ operating license status, the letter also demands the CEOs to confirm their compliance with the order within seven days.
“You are therefore directed to immediately cease and desist from dealing with Flutterwave and Chipper. You are thereafter required, within seven days of the date of the letter to confirm to CBK your compliance with the directive,” the CBK’s letter reads.
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