Banxso hit by triple blow from the FSCA, the FIC & the NPA
Banxso, the online trading platform, faces a triple blow as the FSCA has provisionally withdrawn its license, the FIC has placed seven bank accounts on hold, and the NDPP has placed a preservation order on its funds amid an ongoing investigation into deep fake ads and investor losses.
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By Chris Steyn
The online trading platform Banxso has been hit a triple blow:
The Financial Sector Conduct Authority (FSCA) has provisionally withdrawn its licence; the Financial Intelligence Centre (the FIC) has placed a hold on seven of its bank accounts; and The National Director of Public Prosecutions (NDPP) successfully applied for a preservation order of the funds in those bank accounts.
Banxso has been under fire for "benefiting" from deep fake ads featuring billionaires Elon Musk, Johann Rupert and Nicky Oppenheimer. Scores of investors who clicked on the ads have reported losses totalling millions.
The latest dramatic developments come in the wake of an FSCA announcement on 19 April this year (2024) that it was investigating Banxso – a sponsor of Ultimate Fighting Championship (UFC) champion Dricus du Plessis and the national football team Bafana Bafana.
In its statement today (16 October), the FSCA disclosed that it had brought the matter to the attention of the FIC. And, on 2 October, the FIC intervened by placing the hold on the bank accounts.
Banxso then went to court to try and get the hold lifted, but failed.
"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 National Prosecuting Authority (the NPA), and that resulted in the NDPP obtaining the preservation order of the funds in terms of the Prevention of Organised Crime Act on 14 October.
"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 as a financial services provider. The provisional withdrawal is based on preliminary investigation findings regarding the activities of Banxso and its possible association with the Immediate Matrix deepfake advertisements. The FSCA is amongst others also concerned about the apparent aggressive and pressurised sales techniques used by Banxso agents when selling financial products to clients, promises of unrealistic returns, the failure to conduct the required risk and needs analyses prior to placing clients in specific financial products, and material losses suffered by clients."
However, the FSCA emphasised that this was a provisional withdrawal of Banxso's license based on provisional investigation findings. "Once the investigation is finalised, the FSCA will consider the investigation and any submissions by Banxso. In the interim, Banxso has been provided with an opportunity to provide reasons for the possible lifting of the provisional withdrawal."
Asked for comment by BizNews, Banxso issued a statement in which it said: "The company vehemently denies all allegations of financial misappropriation and/or the maladministration of client accounts, as well as any and all allegations in respect of "deepfake advertisements" and any impropriety related thereto. 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."
Here is the FSCA statement in full:
Here is Banxso's response in full
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