Prominent South African trading platform’s license withdrawn and bank accounts seized

The Financial Sector Conduct Authority (FSCA) has provisionally withdrawn Banxso’s licence to operate, and the Financial Intelligence Centre (FIC) has placed a hold on seven of its bank accounts.

The National Prosecuting Authority (NPA) has also successfully applied a preservation order for the funds in the seven bank accounts. 

Banxso has been under fire for “benefiting” from deep fake ads featuring billionaires Elon Musk, Johann Rupert and Nicky Oppenheimer. Some investors who clicked on the ads have reported losses totalling millions.

The company also had high-profile sponsorships with Bafana Bafana and Dricus du Plessis. 

The FSCA began investigating the company earlier in April 2024 for possible contraventions of financial sector laws following complaints regarding Banxso’s conduct. 

This followed reports that Banxso appeared to be profiting from ‘deepfake’ adverts, which promised profits of up to R300,000 a month from an investment of R4,700.

Manuel de Andrade, Banxso’s chief operating officer, has stated that the company has no connection to the adverts and claimed it was a victim of hacking.

On 16 October 2024, the FSCA provisionally withdrew the company’s licence to operate following preliminary findings. The investigation is not yet complete, the FSCA said. 

“The FSCA has taken this step because it is concerned that there may be a risk of harm to clients and/or the general public if Banxso continues its operations,” the regulator said in a statement. 

“The provisional withdrawal is based on preliminary investigation findings regarding the activities of Banxso and its possible association with the Immediate Matrix deepfake advertisements.”

Regulators are also concerned about the aggressive and pressurised sales techniques used by Banxso agents when selling financial products to clients. 

The FSCA also flagged promises of unrealistic returns and a failure to conduct the required risk and needs analyses prior to directing clients towards specific products. 

This is a provisional withdrawal of Banxso’s license based on provisional investigation findings. Once the investigation is finalised, the FSCA will consider it and Banxso’s submissions.  

In the interim, the regulator said Banxso has been provided with an opportunity to provide reasons for the possible lifting of the provisional withdrawal. 

The FSCA brought the matter to the FIC’s attention earlier this year, prompting it to place a hold on seven Banxso bank accounts. 

On 4 October 2024, Banxso approached the Western Cape High Court for an order lifting the hold on the bank accounts. On 8 October 2024, the court ruled against Banxso and the hold was maintained.

The FSCA also brought the matter to the attention of the Asset Forfeiture Unit of the NPA. The National Director of Public Prosecutions successfully applied for a preservation order of the funds in the bank accounts on 14 October 2024,

Banxso responds

Banxso released a statement yesterday, strongly denying all allegations of financial misappropriation and maladministration. 

It also denied allegations of using deepfake advertisements. 

“The company maintains that this is a misstatement of fact, which will be fully ventilated in the appropriate forums as more details are made available to us.”

Banxso said it was committed to assisting the FSCA in finalising its investigations “with a positive outcome towards the company and its clients”.

The company said it is engaging with relevant stakeholders and the FSCA to gather all the necessary facts and understand the full scope of the situation.

The company said it is committed to transparency and regulatory compliance across all its operations.

“Moreover, the company’s primary focus remains resolute on protecting clients’ interests at all costs, and, as such, it will do everything in its power to ensure business continuity as far as possible within the confines of the FSCA’s regulatory processes.”