When trust breaks: 2025’s fintech controversies and what they mean for the industry

The WhatsApp message landed at 3 am. “Have you seen what’s happening?” Attached was a screenshot of a tweet thread unravelling faster than anyone expected. By morning, one of Nigeria’s most celebrated fintech founders was out of a job. By afternoon, employees were sharing stories they’d kept quiet for months. By evening, the industry was asking a question nobody wanted to answer out loud.

If we can’t trust the people building fintech, why should customers?

2025 became the year Nigerian fintech’s trust crisis went from whisper to scream. Not because fraud was new. Not because bad actors suddenly appeared. But because the scandals that broke this year weren’t about faceless hackers or abstract security failures.

They were about the humans behind the apps. The founders. The systems. The promises turned hollow when tested.

1. The fall of a fintech founder

November brought the kind of scandal that makes investors nervous, and employees update their LinkedIn profiles. Ezra Olubi, co-founder of Paystack, was fired following sexual misconduct allegations. Not after an investigation. Before one concluded.

The details emerged in fragments across social media. Then came Olubi’s own statement claiming he’d been fired unfairly, which only amplified the noise.

Paystack had become the poster child for Nigerian fintech success. Acquired by Stripe for over $200 million in 2020. Operating across multiple African markets. A company parents pointed to when their kids said they wanted to work in tech.

Now it was the company people referenced when discussing workplace culture failures.

Ezra Olubi

The scandal wasn’t just about one person’s alleged behaviour. It exposed how fragile a reputation is in an industry built on trust. If customers can’t trust that their payment processor maintains ethical standards internally, why would they trust it with their money?

2. The equity that never came

October’s EasySpend scandal hit differently. Not because it involved customers losing money, but because it involved employees losing dignity.

The story broke when frustrated workers went public about a scheme they claimed amounted to exploitation. They’d been promised equity in exchange for work. Some had laboured for months on that promise. When it came time to deliver, the equity evaporated like morning mist.

The details painted an ugly picture. Employees are working without proper compensation. Founder allegedly using the lure of startup equity to extract free labour. When workers demanded what they’d been promised, they got excuses instead of shares.

Tobenna Okolo, founder of EasySpend (IMG: Tobenna Okolo on LinkedIn)

It was a different kind of trust violation. Not customers versus company, but founders versus the people who believed in their vision enough to bet their time on it. In an ecosystem already struggling to retain talent, treating employees as disposable contradicts every founder playbook lesson about building sustainable companies.

3. The market for identity

July brought a scandal that made the others look almost quaint. The Economic and Financial Crimes Commission (EFCC) uncovered something that sounded too dystopian to be real. Over 12,000 young Nigerians were selling their identity credentials to fintech companies for ₦5,000 apiece.

Bank Verification Numbers. National Identity Numbers. The digital keys to financial systems. Being traded like airtime vouchers.

The fraud ring wasn’t sophisticated. It was volume-based. Thousands of people are willing to sell their biometric and identity data. Fintech companies allegedly buy those credentials to inflate user numbers, bypass KYC requirements, or enable fraudulent accounts.

The implications cascaded outward. If fintechs were building growth on fake accounts created with real people’s stolen identities, what did that say about their actual user numbers? Their transaction volumes? The metrics investors used to justify valuations?

More troubling was what it revealed about desperation. Young Nigerians are so economically squeezed that they’d sell the keys to their financial identity for $5. And companies are willing to buy.

4. When the fintech giant stumbles

Flutterwave’s troubles bridged 2024 and 2025 like a bad hangover. The company had suffered a ₦11 billion breach in April 2024. By January 2025, Nigerian police arrested 179 people in what they called Operation Butterfly Net.

The arrests didn’t end the story. Throughout 2025, questions lingered. How did the breach happen? Why did it take so long to catch the perpetrators? Were customers fully compensated? The answers remained murky even as Flutterwave processed billions in legitimate transactions.

Olugbenga Agboola, CEO, Flutterwave

For the industry, Flutterwave’s ongoing crisis underscored an uncomfortable reality. Even the biggest, most funded, most sophisticated Nigerian fintech entities weren’t immune to massive security failures.

If Flutterwave could get hit for ₦11 billion, what did that mean for smaller platforms with fewer resources?

Examining the root problem

Adebare Akinwunmi, a lawyer who’s watched the Nigerian fintech sector evolve, sees these scandals as symptoms of something deeper than security failures or bad luck.

“Legally, these cases signal a recurring breakdown in both governance structures and leadership accountability within Nigerian fintechs,” he explains. “They reveal weak internal controls, inadequate board oversight, and an over-concentration of power in a few individuals, often founders, with little transparency or documentation.”

But Akinwunmi goes further than pointing at structural problems. He identifies something harder to regulate.

“Beyond structure, they also highlight a more fundamental issue. The character of leadership. Fintechs are trust-based businesses, and when individuals at the helm lack moral restraint or personal accountability, even the best governance frameworks can be circumvented.”

His observation cuts to the heart of why 2025’s scandals felt different. The Ezra Olubi case wasn’t about missing compliance documents. The EasySpend situation wasn’t about inadequate board meetings. These were failures of character dressed up as business decisions.

“In many of these cases, the scandals were not inevitable,” Akinwunmi notes. “They were enabled by leaders who operated without ethical discipline, treating corporate assets and authority as personal extensions of themselves.”

The natural response to a scandal is usually more rules. Stricter regulations. Heavier penalties. More oversight. The Central Bank of Nigeria (CBN) spent 2025 doing exactly that. Onboarding bans. Increased KYC requirements. Substantial fines.

But Akinwunmi argues the problem isn’t a lack of regulation. “Nigeria’s legal and regulatory frameworks are largely sufficient on paper. Company law, securities regulation, and fintech oversight already provide mechanisms for accountability. The real problem is not the absence of law, but the absence of internal governance culture and ethical leadership within many startups.”

He’s describing a timing gap that creates vulnerability. “What these trust failures expose is a gap in enforcement timing and leadership quality. Many fintechs operate informally until they scale, by which point poor governance habits and sometimes questionable ethical practices are deeply entrenched. Laws can punish misconduct after the fact, but they cannot substitute for leaders with integrity who choose transparency and accountability even when regulation is light.”

It’s the classic startup dilemma. Move fast and break things works until the things you break include trust, employee well-being, and customer funds. By the time companies get big enough to attract serious regulatory attention, the culture is set. The habits are formed. The character of leadership is established.

What breaks when trust does

Each scandal told a different story. A founder’s misconduct. Founders exploiting workers. An identity theft marketplace. A payment giant’s security crisis. But together they revealed something deeper.

Nigerian fintech had grown so fast that it forgot to build the foundations of trust required. Due diligence on founders. Fair treatment of employees. Security infrastructure that actually works. Systems to verify that growth is real, not inflated with fake accounts bought from desperate young people.

For investors who poured $230 million into Nigerian fintech in 2025, the scandals raised uncomfortable questions. How many of their portfolio companies had the same governance gaps?

The same concentration of founder power?

Can the same informal operations be scaled beyond sustainability?

For customers, the calculation became more complex. Yes, fintech offered convenience. Mobile payments. Quick loans. Digital wallets. But at what cost? If your payment processor’s co-founder gets fired for misconduct, is your money safe? If the crypto platform you use can’t refund customers from a 2023 hack by 2025, should you trust it with new deposits?

Akinwunmi’s conclusion is sobering but clear. “Ultimately, fewer scandals will not come from more rules alone, but from having principled individuals in leadership positions who understand that trust, once broken, is almost impossible to rebuild.”

It’s an answer that offers no quick fixes. You can’t regulate character. You can’t audit integrity. You can write all the compliance manuals you want, but if the person at the top sees rules as obstacles rather than guardrails, those manuals become decorative paperwork.

The Nigerian fintech industry faces a choice. It can keep prioritising growth over governance, speed over sustainability, and charisma over character. Or it can do the harder work of building companies led by people who understand that financial services require something more than technical skill and fundraising ability. They require trustworthiness.

The post When trust breaks: 2025’s fintech controversies and what they mean for the industry first appeared on Technext.