Cyber Fraud: How Fraudsters Stole Over ₦5 Billion From 3 Fintechs

According to a report by Nairametrics, the alarming increase in fraudulent activities reported in financial institutions have been traced to more insider jobs, a situation which has posed more challenge for these companies to secure their systems effectively.

The Chief Executive Officer of one of Nigeria’s digital banks, Aladin, Darlington Onyeagoro, who spoke to Nairametrics revealed how hackers got access to over ₦800 million belonging to a Nigerian fintech.

According to Onyeagoro, some insiders were fingered in the fraudulent activity, a development which has been a source of worry and a major challenge for the fintech companies in Nigeria.

Another issue was the fact that the hacks were also traced to sister fintech platforms confirming that even a well-secured payment platform was liable to compromise when connected to another platform with a very poor cyber security system.

Most recently, popular crypto platform, Patricia has been battling with payment issues with its numerous customers after the platform lost millions of funds to hackers.

Recall Patricia had suspended withdrawals in May after disclosing that Bitcoin and naira assets had been compromised, resulting in an undisclosed financial loss. This was put at about $2 million according to a report by Techcabal.

The platform through its founder and CEO, Hanu Fejiro, has however promised that repayment of its customers would start from November 20, 2023.

Another fintech, Flutterwave was earlier this year, attacked by hackers and about ₦2.9 billion of customer funds was stolen from the platform.

The platform had responded by asking users to activate safety protocols and protect their funds but failed to reveal or confirm exactly how much was lost.

The hack was eventually exposed via court documents that showed certified true copies of a petition by Flutterwave’s legal counsel to the police dated February 20, 2023 stating details of the fraudulent activity.

According to the court document, the platform had requested the assistance of the police to obtain court orders from the magistrate court to enable the recovery of the stolen funds by freezing 107 bank accounts in 27 banks.

According to the Financial Institutions Training Centre, FITC’s Fraud and Forgeries Report, Nigerian commercial banks lost a total of ₦5.79 billion to fraud activities in Q2, 2023.

The losses indicated a huge 1,125.03% increase when compared with the ₦472 million lost in Q1, 2023.

The report also confirmed the increase in inside jobs in fraud-related issues as insider activities increased by 20.55% in the second quarter of this year.


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