There are numerous potential downsides once regulators suspect AML infractions – operational, reputational, financial, and more.
Flutterwave, a digital payments start-up with headquarters in Nigeria and San Francisco, was recently accused by Kenya’s High Court of AML improprieties. In court papers, the regulators said it began investigations after transactions in certain companies were flagged on the suspicion that they involved the proceeds of criminal activity. The court froze the company’s bank accounts holding more than $40 million. The money, held in 52 multi-currency accounts in three banks, can’t be moved or withdrawn for a period of 90 days.
Flutterwave strongly denies any wrongdoing. However, the fact remains that the company is effectively at a standstill for transacting business in Kenya. This is a reminder of regulators’ powerful oversight and ability to cause material business disruption.
