LAGOS, Nigeria — Nigerian authorities are intensifying efforts to prosecute individuals linked to a major fraud involving Flutterwave, a prominent fintech company, following a breach in October 2023 that exposed vulnerabilities in its Point-of-Sale (POS) system.
The Nigeria Police Force has announced plans to arrest 601 individuals who allegedly received funds from the fraudulent transactions, marking a significant development in the ongoing investigation.
The breach, attributed to a technical glitch in Flutterwave’s POS system, enabled 814 agents to process transactions exceeding their account balances.
This exploit facilitated 9,633 unauthorised transactions, resulting in the illegal transfer of billions of naira to various bank accounts.
Court documents reveal that the affected banks include Polaris Bank, Stanbic IBTC, and Wema Bank, among others.
While the fintech company’s total exposure was estimated at ₦21.2 billion, swift action by Flutterwave and partner banks managed to preserve ₦7.2 billion by restricting compromised accounts.
In August 2024, the Federal High Court in Abuja rejected a police request to reverse the fraudulent transactions, citing the necessity for fair hearing and due process.
As a result, law enforcement has shifted focus to freezing suspect accounts and prosecuting those believed to have been complicit.
“The Nigerian court’s refusal to authorise a blanket reversal of funds underscores the importance of adhering to legal protocols in financial fraud investigations,” said a source familiar with the case.
Flutterwave initially reported the breach as a failed hacking attempt, but investigations later revealed the scale of the fraud.
Authorities contend that recipients of the unauthorised funds were likely aware of the illegal nature of the transactions.
This case has raised broader concerns about the challenges of financial fraud in Nigeria’s burgeoning fintech sector.
Analysts emphasise the need for stronger cybersecurity measures and proactive monitoring to safeguard digital payment systems.
As the police expand their probe, all eyes remain on the unfolding legal and regulatory responses to one of the country’s most significant financial fraud incidents.
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