Flutterwave is embroiled in a complex legal battle as it grapples with the aftermath of a significant security breach that occurred in October 2023. The latest development in the saga saw a federal High Court in Abuja reject a police request to freeze and reverse billions of naira allegedly stolen from the company’s account.
The incident unfolded on October 12 and 13, 2023, when a system glitch enabled several Point of Sale (POS) merchants to exploit vulnerabilities in Flutterwave’s platform, facilitating unauthorised transfers of funds. Despite the magnitude of the breach, Flutterwave maintained that no customer funds were lost, attributing the incident to a system error.
In a bid to recover the stolen funds, the Inspector General of Police filed a motion in July 2024, seeking a court order to compel 12 banks and financial institutions to reverse the billions of naira allegedly transferred to numerous accounts belonging to unidentified individuals. The police argued that approximately 244 suspects were involved in the fraudulent scheme.
However, Justice Peter Lifu of the Federal High Court dismissed the police’s ex parte motion, emphasising the importance of due process and the right to a fair hearing for all parties involved. The judge highlighted the need to hear the banks’ side of the story before making a decision.
This latest legal setback for Flutterwave adds to a series of challenges the company has faced in recent times. In February 2024, a court in Lagos ordered the unfreezing of accounts belonging to 27 banks and financial institutions following a previous freeze obtained by Flutterwave in an attempt to recover the stolen funds.
The fintech company has previously faced allegations of fraud and money laundering, which it has consistently denied. The ₦11 billion security breach reported early 2024 further intensified scrutiny of Flutterwave’s operations and security measures.
As the legal battle unfolds, questions remain about the effectiveness of Nigeria’s regulatory framework in addressing cybercrime and protecting the interests of both fintech companies and consumers. The outcome of these cases will have far-reaching implications for the fintech industry in Nigeria and beyond.
Flutterwave’s ability to navigate these challenges and restore public confidence will be crucial for its continued success. The company has emphasised its commitment to cooperating with law enforcement agencies and implementing measures to enhance its security infrastructure.
