Flutterwave Scandal in Kenya yet to end as second case - Tech Preview

Flutterwave Scandal: Africa’s most valuable startup, Flutterwave, still has a problem in Kenya. The government took about $3 million of its money due to concerns about illegal activities like fraud and money laundering. This money is currently held in two banks and 19 mobile money accounts. The issue is being dealt with by Kenya’s highest court.

This $3 million was taken away in late August of the previous year. This happened not long after the Kenyan court froze $52.5 million from Flutterwave and a few other companies, including Elivalat Fintech, Bagtrip Travels, Boxtrip Tours ad Travels, Hupesi Solutions, Adguru, and Cruz Ride Auto Ltd.

With each time the government takes the money, a special agency called the Assets Recovery Agency (ARA) gets involved. This agency’s job is to track down money that might have come from illegal activities.

Last week, the first situation ended, and $52.5 million was given back since the Assets Recovery Agency (ARA) took back their claim. But the second situation is still ongoing. This time, Adguru, Flutterwave, and Hupesi Solutions are involved. A judge from the high court, Esther Maina, decided that the next discussion about it will be on March 23.

Some people think that this new situation might not go to a full trial. However, Flutterwave is still waiting for the court’s approval, which they need to get a license to do business in Kenya.

When we asked Flutterwave about this new situation, they said, “…we’re pretty sure that the ongoing case is just happening because that’s how courts usually work. It will probably end like the last one, where we were found not to have done anything wrong.”

“We’re glad to move past this and focus on making payments easier for all sorts of things in one of Africa’s most exciting markets,” the fintech company said.

What’s been going on so far

Money freed after the first case ends, but Flutterwave’s money still stuck. The court released the money that belonged to Flutterwave and others after the Assets Recovery Agency (ARA) officially decided not to take it on February 27 this year. This closed the first situation.

We found out that even though the Kenyan court gave back the money after the first case ended, Flutterwave couldn’t use the money by Friday. But some people involved in the case could use their money. It’s not clear why Flutterwave couldn’t use its money yet. Flutterwave told some sites that they are “working through the process to get access to all the money.”

The money was given back after the Kenyan court rejected a request from 2,468 people from Nigeria. They wanted to separate some of the frozen money in case the government took it. These people were trying to get back money they had put into a sports betting platform. They said the platform, which used Flutterwave to process payments, tricked them into investing, and they lost their money.

The court said no to this request on February 9 because the ARA had already said in December of the previous year that they don’t want to take the money. This was almost a month after the ARA said they don’t want Boxtrip Travel and Tours, and Bagtrip Travels in the case anymore.

The Beginning

Flutterwave scandal in Kenya started in July of the previous year. The Assets Recovery Agency (ARA) accused Flutterwave of doing fraud and money laundering. Because of this, they stopped Flutterwave and its partners from using millions of dollars in their accounts.

The agency said that Flutterwave’s bank accounts were used to hide illegal money, even though they were supposed to be used for helping people pay for things. The agency also said that Flutterwave couldn’t show any proof that their customers actually bought things, and they couldn’t prove that they paid the merchants they were supposed to. The agency asked the court to give the money to the government.

But things changed when a new government came into power later that year. They decided to drop some big cases, including the one against Flutterwave.

Flutterwave was started in 2016 by Iyinoluwa Aboyeji, Olugbenga “GB” Agboola (CEO), and Adeleke Adekoya. It helps people send money to and from different countries in Africa. They also have something called Flutterwavestore, which is like a shop online for small businesses.

This company got $350 million last year and was said to be worth $3 billion. This makes it one of the most valuable new companies in Africa. But in the last year, they’ve had a lot of problems, like people saying they were treated badly, money being used the wrong way, and not being managed well.

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