Flutterwave, a Nigerian fintech unicorn valued at $3 billion, is currently at the center of a financial scandal that has adversely affected digital asset traders in Africa’s largest Bitcoin market. Reports suggest that the company was hacked for 2.9 billion nairas ($6.4 million) recently, and some users claimed to have received notifications that their accounts had been emptied.
Although the company denied the hack earlier this month, citing an unusual trend of transactions on some users’ profiles, local media have exposed it. Dozens of users have confirmed that they lost millions of naira to the hackers, and one victim, Alex Onyia, revealed that he lost over 8 million nairas ($17,400), with a third transaction attempt failing due to insufficient funds.
Flutterwave’s Reputation Hit
The hack has dealt a blow to Flutterwave’s reputation, as it is widely regarded as one of the most successful fintech companies on the African continent. Flutterwave provides online payment services for merchants and consumers, and it has been praised for revolutionizing the payment landscape in Africa. However, the recent scandal has called into question the company’s security measures and caused significant concerns among its users.
The situation is particularly worrisome for digital asset traders in Nigeria, as Flutterwave is a key player in the country’s crypto market. Many traders use the platform to deposit and withdraw funds from their crypto exchanges, and the hack has made them vulnerable to potential losses.
Flutterwave’s denial of the hack raises further questions about the company’s transparency and accountability, and it remains to be seen how it will address the situation. In the meantime, digital asset traders in Nigeria are advised to exercise caution and implement additional security measures to protect their funds.
Moreover, reports from Nigerian media outlets have revealed that Flutterwave’s legal representative filed court documents to request the freezing of bank accounts associated with the hackers and other third-party recipients involved in the recent alleged hack of the digital payments startup.
Flutterwave hack threatens digital currency traders
The digital payments company Flutterwave, which is valued at $3 billion, has been embroiled in a financial scandal recently. Flutterwave was allegedly hacked for 2.9 billion nairas ($6.4 million), and some users received notifications of their accounts being emptied.
However, the company denied the hack and claimed that only users who hadn’t activated some of its recommended security settings had been affected. Local media exposed the company, with dozens of its users reporting that they had lost millions of naira to the hackers.
In addition, local outlets discovered court filings by Flutterwave’s lawyer seeking an order to freeze bank accounts belonging to the hackers and third-party recipients. The effect of the hack is now being felt by the Nigerian digital asset community, with any bank account that transacted with the alleged hackers being frozen.
This has led to the freezing of hundreds of bank accounts in 27 Nigerian banks, affecting many digital asset traders and causing outrage in the crypto world.
The Nigerian fintech unicorn, Flutterwave, is reportedly at the center of a financial scandal that has affected digital asset traders in Africa’s largest Bitcoin market. The company, which was valued at $3 billion in its latest fundraising, was hacked recently for 2.9 billion nairas ($6.4 million). The hack was reported by some of its users who received notifications of their accounts being emptied.
Flutterwave, however, denied the hack and claimed that during a routine check of its systems, it had identified “an unusual trend of transactions on some users’ profiles.” It found that only users who hadn’t activated some of its recommended security settings had been susceptible. Local media outlets, however, have exposed the company, with dozens of its users proving they lost millions of naira to the hackers.
Freezing of Bank Accounts
Flutterwave’s court order to freeze bank accounts belonging to the hackers and third-party recipients has now extended to direct recipients, second, and third beneficiaries. This has led to the freezing of hundreds of bank accounts in 27 Nigerian banks and caused outrage in the crypto world. The freeze has affected any bank account that transacted with the alleged hackers, including digital asset traders.
The freeze has had an unproportionate effect on digital asset traders, as a significant amount of the stolen funds went to OTC trading desks. With the country’s central bank being anti-crypto and barring banks from processing related payments, OTC desks have become more popular in the West African country.
The crackdown could be a big blow to the thriving digital asset industry, as Nigeria is home to Africa’s largest digital asset market, with one report claiming 20% of the nation’s 213 million residents own a digital asset.
Flutterwave has had previous controversies. In 2022, regulators in some of the markets it operates in, including Kenya, accused it of offering its services without a license. The Kenyan central bank froze $50 million held by the startup in 62 bank accounts, but it has since recovered the funds.
Flutterwave, a major African fintech valued at $3 billion, is entangled in a damaging financial scandal after an alleged $6.4 million hack. Denying the breach, Flutterwave’s reputation takes a hit, particularly among Nigeria’s crypto traders. Legal actions to freeze hackers’ accounts intensify the controversy, affecting numerous users and sparking outrage in the crypto community.