- The UK’s financial regulator has retracted a scam warning from London fintech Lanistar.
- Lanistar, which is preparing to launch a payment card, was hit with the warning on Wednesday, with the UK’s Financial Conduct Authority (FCA) saying the startup was operating without authorization.
- The FCA revoked that notice, saying Lanistar had agreed to amend its marketing materials to say it wasn’t offering unregulated financial services.
- Business Insider dug into Lanistar’s corporate filings last week to find its CEO had no prior experience in finance or banking, instead coming from a background in real estate lettings.
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The UK’s financial regulator has withdrawn a warning around London fintech Lanistar after several days of confusion.
Lanistar, founded in 2019, wants to offer challenger banking services but was hit with the scam warning on Wednesday from the UK’s Financial Conduct Authority (FCA). The FCA said Lanistar was offering financial services without its authorization, something Lanistar disputed.
The regulator removed its warning on Friday night after discussions with the startup.
In a statement on its website the FCA said: “Today, the firm [Lanistar] agreed to add an appropriate disclaimer to its marketing materials updating its regulatory status to confirm that it is not conducting regulated activities. The firm is also going to amend certain aspects of its website. On that basis we have removed the consumer warning.
“The firm has confirmed it is in a pre-launch process. We will be working with the firm closely ahead of their launch.”
In the UK, firms and individuals must be authorized by the FCA to carry out regulated financial service activities and offer credit to consumers.
Lanistar has been hyping up its banking services via celebrity social media ads, hoping to take on neo-banks like Revolut and Monzo.
The company wants to target Gen Z and millennial consumers with a “polymorphic” (meaning many forms) and the “world’s most secure” debit card. The service has yet to launch, with the company opening for pre-registrations on November 15. The firm said it plans a rollout in January.
The firm clarified that is working with authorized partners in payments to offer its service.
Lanistar said on Friday that it had 200,000 interested customers on its waiting list, and touted 7.8 million engagements from its Instagram influencer content which in turn gave the startup 70,000 Instagram followers.
The startup has nonetheless drawn scrutiny. The firm publicized an external $19 million fundraise at a $190 million valuation, but later retracted this and said the money had been raised by CEO Gurhan Kiziloz’s family members.
After enquiries by Business Insider, Lanistar also acknowledged that Kiziloz, the face of the startup, has no prior experience in tech, finance, or banking, and that his previous interest was in real estate lettings. Kiziloz was also only made a director of the startup in October this year, a year after it was founded, the startup is majority controlled by his father.