Kenya Unfreezes Flutterwave’s USD 52 Million Held on Money Laundering Suspicion

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In mid-2022, it was reported that the Kenyan authorities raised questions about the activities of payments firm Flutterwave, resulting in the freezing of millions of dollars of its funds. The company was allegedly involved in money laundering, such as transferring large amounts of cash among its top executives, but there was no evidence that the money was used for merchant payments.

At the same time, it was also reported that Flutterwave was operating in Kenya without proper documentation and authorization from the relevant authorities such as the CBK. As a result, Kenya froze up to USD 52 million, or KES 6.2 billion, of Flutterwave’s funds, which were in tens of bank accounts belonging to the company.

Days later, Flutterwave denied allegations of financial improprieties. It claimed to maintain high regulatory standards and regularly audit its Anti-money laundering (AML) practices. In a statement, the company said that as a payment processor, it earned fees through transaction charges and held corporate funds to support its operations.

This past week, we learned that the firm’s CEO Olugbenga Agboola, who at the height of the scandal had been pressured to resign, jetted into the country to explore two primary goals: see that the funds frozen in Kenya are given back to the company, and work with relevant authorities to allow Flutterwave to run operations in the country. The latter would entail getting the necessary licenses from the likes of CBK.

It appears that one of the goals has been met so far. A statement issued by Flutterwave reveals that the funds have been unfrozen, and Flutterwave will continue to work with local partners. This follows clearance from the Asset Recovery Agency, ARA.

“We are pleased to have this matter resolved so we can resume our work with our strategic partners in Kenya, providing innovative payment solutions to companies and individuals in one of Africa’s largest and most dynamic economies,” said Flutterwave Founder and CEO, Olugbenga Agboola. 

“The fintech sector in Africa, with its new entrants and accelerated pace of growth attracts a considerable amount of scrutiny and at times, suspicion. Given our own rapid growth and status as a first mover, we anticipate and welcome the opportunity to be transparent about our operations and cooperate with regulators,” he adds.

Flutterwave employs thousands of people in Kenya, including Uber drivers, food vendors, and others who depend on the payment platform for their daily earnings.

Whether it will be approved to fully run its payments services in Kenya is something we will have to wait and see. Flutterwave, and Chipper Cash, are perhaps the only high-profile payments processors that are yet to secure a license to operate in Kenya. Others such as DPO Group and Virtual Pay have since been approved by the CBK.