The City watchdog has imposed restrictions on a fintech firm owned by Uruguay’s first-ever billionaires as it tries to improve standards in a more lightly regulated segment of the payments industry.
The Financial Conduct Authority (FCA) has blocked Larstal Ltd, which operates as Astropay, from providing payment services, accepting new customer funds, or onboarding new customers without its written approval, according to a post on the FCA’s website from Tuesday.
The FCA imposed the restrictions via a so-called voluntary undertaking, where a firm pledges to improve its operations.
Astropay owed several million dollars to customers at the end of 2022, Bloomberg News first reported.
Under the FCA’s latest restrictions, it must ensure that “all relevant funds are appropriately ring-fenced”.
Emerging markets-focused Astropay is part of a payments empire overseen by Andrés Bzurovski Bay and Sergio Enrique Fogel Kaplan.
It is said to specialise in facilitating payments for high-risk clients in industries including online gambling, adult entertainment, and foreign exchange trading.
Astropay operates under a UK e-money institution (EMI) licence. An EMI licence has much lower capital requirements than a full banking licence and gives challenger firms a way to compete with larger incumbents in payment services in the UK market.
However, the watchdog has become increasingly concerned by fraud and anti-money issues within the sector.
Fogel told Bloomberg that Astropay and the FCA “mutually agreed to voluntarily suspend” the company’s EMI licence after “the realisation that the license held was not necessary to conduct its business at this time”.
A spokesperson for Astropay said it had “voluntarily placed restrictions to improve operational capabilities”. The FCA declined to comment.
“Our services in the UK including the the issuance of electronic money and the provision of payment services are temporarily unavailable due to voluntary restrictions on our financial activities,” a notice on Astropay’s website reads.