Former UK government minister Gavin Williamson has been cleared to take up a position on the advisory board of fintech Lanistar. Separately, the startup, which has previously found itself in hot water with the FCA, has ended its Electronic Money Directive (EMD) agent relationship with Modulr.
The Advisory Committee on Business Appointments (Acoba) has given former education minister Williamson the green light to take up the advisory board position, for which he will be paid in shares.
However, Acoba has warned Williamson against using his connections from time in government for the benefit of his new company.
Williamson told Acoba that he would be "providing guidance, connections (with financial institutions) and leadership to Lanistar".
Rules the committee: "In the description of your role, you said that you would provide connections to Lanistar. You also made clear you would have no contact or dealings with government.
"There is a risk your connections could be used to unfairly access and influence the government and its arm’s length bodies. Making use of contacts within government even indirectly would be a breach of the Rules which impose a lobbying ban on all ministers for 2 years on leaving office."
The new advisory board is not yet live but will meet with Lanistar's executive committee once a month and be made up of people both inside and outside the industry, the firm tells Finextra.
Founded in 2019 to much publicity, Lanistar has still yet to launch in the UK but does operate in Brazil.
Its original product pitch was a debit card that links to up to eight bank cards to help customers better manage their finances via "polymorphic" technology and open banking.
However, the current offering in Brazil includes only a standard debit card with the promise of an upcoming release - a "game-changing new payment card product, which is designed to help our customers streamline their money through cutting-edge technology and unique patents".
In 2020, the FCA issued a warning to would-be investors in Lanistar stating that the firm was providing services or products without authorisation.
The warning came days after Lanistar paid a host of social media influencers - including Love Island contestants and drag queens - for a promotional blitz, with founder Gurhan Kiziloz boasting of a vision to become a "£10bn+ fintech".
Modulr agreement
Having initially claimed to have been in talks with the FCA about securing a full banking licence, in 2021 Lanistar secured the regulator's approval to operate as an Electronic Money Directive (EMD) agent of payments firm Modulr.
As an EMD agent, Lanistar could distribute and redeem electronic money on behalf of Modulr, meaning it could offer its customers digital accounts to send and receive payments.
Yet, the firm has still not launched in the UK and has confirmed to Finextra that it is no longer a regulated EMD of Modulr as "we chose to leave them due to their inability to provide the full banking service we have enjoyed in Brazil with our partner there".
The company did not respond to questions on any alternative to the Modulr deal or a timeline for UK launch. However, on its website, it insists that it still plans to launch in the country - as well the EU, Argentina and Colombia - "very soon".
Modulr has had its own issues with the FCA in recent weeks, with the Payments-as-a-Service agreeing customer onboarding restrictions until it comes up to scratch with new regulations.