Flutterwave, a Nigerian fintech unicorn, has been accused of being breached for the second and third time on March 1 and 14, 2023, by three anonymous sources who shared evidence with TechCabal.
According to the sources, the hackers used fraudulently obtained funds from Flutterwave accounts to buy USDT on the crypto platform Binance. The total amount of money involved in both incidents is estimated to be N550 million. Flutterwave denied the claims and reiterated its previous statement that its systems were not hacked.
Allegations and Denials By Flutterwave
Earlier this year, Flutterwave identified an unusual trend on some users’ profiles during a routine check of its transaction monitoring system. The company launched a review, which revealed that some users who had not activated recommended security settings might have been susceptible to hacking. The payment giant maintains that this is the extent of the matter.
However, in March, hackers transferred over ₦2.9 billion from Flutterwave accounts, which the company denied. Subsequently, it pursued legal action to recover billions of Naira from several beneficiaries. Hundreds of bank accounts were blocked in connection with the incident, and cryptocurrency merchants were among the account holders affected.
Three first beneficiaries who received the diverted funds told TechCabal that they helped source USDT for a Chinese merchant with whom they routinely did business. The trail of those affected widened, and about 295 people are now affected by all three incidents, and their accounts remain frozen after Flutterwave petitioned the police and courts to block the accounts.
Flutterwave insists that neither the company nor its customers lost any funds. However, some cryptocurrency merchants whose accounts were blocked claim that Flutterwave filed petitions against them with the Economic and Financial Crimes Commission (EFCC). One of the first beneficiaries is reportedly in EFCC custody, while the other has absconded.
Affected individuals have submitted petitions against Flutterwave at the Nigerian Human Rights Commission and the Federal Competition and Consumer Protection Commission. Those affected also filed a petition at the Yaba Magistrate Court, pleading their innocence and asking the court to unfreeze their accounts.
The payment startup has reportedly filed a forfeiture petition against the beneficiaries and plans to recover millions of dollars in funds from hundreds of users. It is collaborating with appropriate authorities and pursuing all available legal options to hold those responsible accountable.
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