Nigerian fintech powerhouse Flutterwave has been thrust into another storm as police detain several bank customers allegedly linked to fraudulent activities on its platform. Investigators are also pursuing 601 additional suspects believed to have benefited from an earlier breach that siphoned ₦11 billion from the company’s accounts.
Court filings, as reported by People’s Gazette, indicate the transactions involved multiple banks, including Polaris Bank, Union Bank, Wema Bank, and others. While Flutterwave has assured the public that customer funds remain intact, the string of high-profile breaches has cast doubt on the company’s security framework.
The controversy adds to a growing list of operational challenges for Flutterwave. Earlier this year, the company sought to recover ₦2.9 billion lost in unauthorised transfers by freezing accounts across 27 financial institutions. However, a Lagos court’s decision to unfreeze some accounts stalled these efforts, raising questions about legal and regulatory obstacles in combating cybercrime.
The troubles aren’t confined to Nigeria. In Kenya, a 2022 court order froze accounts linked to Flutterwave amid allegations of money laundering involving $51 million. Although the company denied wrongdoing, these incidents have spurred concerns about governance and operational integrity.
“The frequent breaches highlight systemic vulnerabilities that the company must address,” said an industry analyst familiar with the case.
Adding to Flutterwave’s woes, internal turbulence has plagued the firm. Late 2023 saw the exit of three senior finance executives following revelations of a 2017 SEC investigation into one of the company’s founders. Flutterwave, however, denied any ongoing probes, asserting its commitment to compliance and transparency.
These security breaches, particularly the April 2024 fraud involving tactically dispersed transfers to evade detection, underscore the urgent need for stronger cyber defence mechanisms. While the company reassures users of the safety of their funds, the mounting incidents have undeniably shaken investor and user confidence.
Beyond the company’s immediate crisis, the Nigerian financial sector is grappling with a broader wave of digital fraud. Data from the Nigeria Inter-Bank Settlement System (NIBSS) reveals a staggering 186% surge in fraud attempts between 2020 and 2022. Experts argue that bolstering consumer education could reduce vulnerabilities, as many schemes exploit user ignorance through phishing scams or deceptive transaction requests.
