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The Financial Sector Conduct Authority (FSCA) of South Africa has revoked the licence of Banxso, a trading platform, following concerns over unrealistic promises and fraudulent advertising practices. The platform came under fire for allegedly using deep fake ads featuring prominent figures such as Elon Musk, Johann Rupert, and Nicky Oppenheimer. Many investors who clicked on these ads reportedly lost millions.
In a recent statement, the FSCA confirmed its decision to withdraw Banxso’s licence, citing potential risks to clients and the general public if the company continued to operate as a financial services provider.
“The FSCA is particularly concerned about the aggressive and pressurized sales tactics employed by Banxso’s agents, the unrealistic returns promised to clients, the failure to conduct proper risk and needs analyses, and the significant losses suffered by clients,” the authority explained.
The regulator emphasized that Banxso could still submit its case for reconsideration. Once the investigation is completed, the FSCA will review the findings alongside any submissions from Banxso to determine if the provisional withdrawal should be lifted.
In a parallel move, the FSCA reported the case to the Financial Intelligence Centre (FIC). Acting under Section 34 of the Financial Intelligence Centre Act, the FIC placed a freeze on seven Banxso bank accounts on October 2, 2024. Banxso subsequently sought legal recourse to overturn the hold on its accounts, but the Western Cape High Court upheld the freeze on October 4, 2024.
Additionally, the FSCA referred the case to the Asset Forfeiture Unit of the National Prosecuting Authority (NPA). On October 14, 2024, the NPA obtained a preservation order for the funds in Banxso’s bank accounts under Section 38 of the Prevention of Organised Crime Act, 1998.
This action follows the FSCA’s earlier warnings in January 2024, where it urged the public to be cautious when investing in certain ventures. Among those highlighted were Livestock Wealth Financial Services (Pty) Ltd and Livestock Wealth (Pty) Ltd, both subsidiaries of the agri-investment startup Livestock Wealth. The FSCA warned that these entities may also pose a risk to investors.
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