In a letter to CEOs of financial institutions, the Central Bank of Kenya (CBK) said financial institutions operating in the country should cease and desist from dealing with two Nigerian fintechs, Flutterwave and Chipper Cash. The letter reiterates claims by CBK Governor Patrick Njoroge and the Asset Recovery Agency (ARA) that the two companies are not licensed to operate in Kenya.
Flutterwave and Chipper’s Clash with the CBK
The Central Bank of Kenya (CBK) has ordered financial institutions in the country to cease and desist from dealing with two Nigerian fintech startups Flutterwave and Chipper Cash. The order came barely 24 hours after CBK Governor Patrick Njoroge had Told journalists that the two entities are not allowed to operate in Kenya.
Prior to CBK’s announcement, a High Court in Kenya ruled that Flutterwave’s bank accounts should be frozen to make way for an investigation into the fintech giant’s alleged illegal activities. The court ruling went on to allow the Kenyan Asset Recovery Agency (ARA) to block Flutterwave’s access to more than 50 bank accounts that hold nearly $60 million.
Like before reported per Bitcoin.com News, the ARA argued that Flutterwave does not provide merchant services as claimed, but is instead involved in money laundering activities. However, Flutterwave fired 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.”
Additionally, the fintech company’s statement claimed that its “anti-money laundering practices and operations are regularly audited by one of the Big Four.”
CEOs of financial institutions must confirm their compliance
While Flutterwave suggested in its statement who is working with regulators, Njoroge’s remarks and CBK’s subsequent letter to CEOs of Kenyan financial institutions dated July 29, reiterate ARA’s allegations that Flutterwave is engaged in ” money transfer and payment services without license or authorization”.
Meanwhile, in addition to updating the heads of Kenyan financial institutions on the status of the operating license of the two fintechs, the letter also asks the CEOs to confirm their compliance with the order within seven days.
“You are therefore requested to immediately cease dealing with Flutterwave and Chipper. You are then required, within seven days of the date of the letter, to confirm to the CBK your compliance with the directive,” the CBK letter reads.
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