Lanistar in trouble: Instagram-hyped London fintech warned by UK watchdog, says could be a scam
Instagram-hyped Lanistar, a London-based neobank has been in news for a couple of weeks now. The Mastercard-backed UK fintech is looking forward to £1bn valuation for its payment technology and recently unveiled the world-first polymorphic payment card, known as the Volt, ahead of its product launch in January 2021.
The British financial technology startup paid social media influencers to generate hype for a bank card ahead of launch, but now if reports are to be believed the Hammersmith-based company’s launch could be a scam.
London fintech @iamlanistar spent some serious £££ from its influencer marketing budget overnight, using Love Islanders, drag queens and TikTok stars to advertise its card launch. Not everyone remembered to flag it as paid advertising, either. pic.twitter.com/0nZiet9qz3
— Emily Nicolle (@emilyjnicolle) November 16, 2020
The Financial Conduct Authority (FCA) has reportedly issued a warning to would-be investors in Lanistar stating the firm is offering service/products without any authorisation. “This firm is not authorised by us and is targeting people in the UK,” the City watchdog warned in a statement on Wednesday. “Based upon information we hold, we believe it is carrying on regulated activities which require authorisation.”
The FCA also added, “be especially wary of dealing with this unauthorised firm and how to protect yourself from scammers. Be aware that scammers may give out other false details or change their contact details over time to new email addresses, telephone numbers, or physical addresses.”
Feeling bad for #lanistar. With Visa, GPS, Jumio, and others they have the right partners (with licences to offer eMoney / prepaid cards)
… but they really didn’t get how FS product launches are very different from non-regulated apps
— Jason Bates (@JasonBates) November 18, 2020
Lanistar also paid social media influencers, footballer Kevin de Bruyne and model Demi Rose to promote the launch of Volt, the world’s most secured card, according to the company.
Founded by Gurhan Kiziloz, Lanistar offers a customer-centric alternative to the personal finance offerings provided by incumbents in the sector, enabling users to consolidate eight bank cards into one.
In response to FCA’s warning, Lanistar said in an official statement, “Legal and regulatory compliance are central to Lanistar’s business and we confirm that we are not providing financial services or products without the FCA’s authorisation. We have announced our intended future services and we will be partnering with firms that are authorised by the FCA to provide financial services or products. We are in the process of contacting the FCA to clarify the position and will be requesting that the Notice is removed.”
Recently, Lanistar signed a strategic partnership with Global Processing Services (GPS). Through the partnership with GPS, Lanistar leverages GPS’ proven Apex issuer processing platform, based on APIs. On top of that, the company will be utilising real-time data feeds to directly manage account holder balances, transactions, enriched data, and more.
To date, Lanistar has raised a total of £17M in funding over 2 rounds to date. The company employs 45 full-time staff and has plans to grow a 150-person support team. Right now, Lanistar competes against the likes of Monzo, Bunq, OakNorth, Revolut, and more.