Kenya digital currency-friendly fintech Flutterwave and Chipper Cash operate illegally: central bank

Kenya’s central bank has accused two of Africa’s leading fintech firms of illegally operating in the East African country. The two digital currency-friendly fintech companies, Flutterwave and Chipper Cash, have reportedly been operating without a license, although the former is battling allegations that it was used to launder over $50 million.

Central Bank of Kenya (CBK) Governor Patrick Njuguna revealed that the two had not obtained the necessary licenses while speaking to journalists at the end of a recent monetary policy committee meeting.

“Flutterwave is not licensed to operate transfer provider or for that matter as a payment service provider in Kenya. They are not licensed to operate and therefore should not be operating. And Chipper, we can also say the same,” the governor revealed , as reported by local outlets.

Flutterwave and Chipper Cash are two of Africa’s biggest fintechs. The latter was founded in 2018 and focuses on cross-border payments via its mobile app. It also allows users to buy and sell digital currencies. Last November, it raised $250 million at a $2 billion valuation in its Series C funding round, which was led by FTX, the exchange led by the controversial Sam Bankman-Fried.

Flutterwave raised $250 million in February this year at a valuation of $3 billion, making it Africa’s most valuable startup. It also ventured into digital assets, partnering with Binance to offer a fiat-to-crypto gateway. However, unlike its peers, Flutterwave was already in regulatory trouble, being prosecuted in Kenya for allegedly facilitating the laundering of at least $52 million.

While Chipper Cash has not responded to CBK’s allegations that they have been operating illegally, Flutterwave has shifted the blame to the central bank.

According to a report by Kenya’s Business Daily, Flutterwave claims it applied for the CBK license back in 2019.

“In 2019, as our business grew, Flutterwave submitted its payment services license application. We have been in constant contact with the Central Bank of Kenya to ensure that we deliver all the requirements and we look forward to receiving our licence, it said.

See: BSV Global Blockchain Convention panel, Blockchain in Africa

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