Banxso faces liquidation as deepfake scandal, fraud allegations, and regulatory crackdown intensify

Key topics:Banxso accused of using deepfake ads to lure investorsFSCA, FIC, and NPA launch coordinated investigations into platformHigh Court hears liquidation case as fraud claims escalate.Sign up for your early morning brew of the BizNews Insider to keep you up to speed with the content that matters. The newsletter will land in your inbox at 5:30am weekdays. Register here.Support South Africa’s bastion of independent journalism, offering balanced insights on investments, business, and the political economy, by joining BizNews Premium. Register here.If you prefer WhatsApp for updates, sign up to the BizNews channel here..By Kerry Lanaghan.Listen to this story instead: .Online trading platform Banxso faces mounting legal and regulatory pressure following months of controversy sparked by deepfake ads and alleged investor fraud. The scandal began gaining attention in late 2023 and involved fake social media ads featuring billionaires Elon Musk, Johann Rupert, and Nicky Oppenheimer falsely endorsing Banxso. By early 2024, dozens of South African investors had come forward, reporting losses totalling millions of rands.In February 2024, BizNews published an exposé after Advocate Petra van Niekerk lost her life savings to the platform. Her story gained national traction, prompting Banxso to issue a refund and invite BizNews to submit questions for a formal response. However, Banxso also became linked to a copyright takedown of the article - a move later proven fraudulent and intended to suppress negative coverage.By March 2024, anonymous whistleblowers emerged, alleging that Banxso was connected to a clone platform called AfriMarkets. The Financial Sector Conduct Authority (FSCA) investigated both entities, citing concerns about deceptive sales tactics and unregulated trading practices. Around R90 million in related funds were frozen.In October 2024, the FSCA provisionally withdrew Banxso's license, while the Financial Intelligence Centre (FIC) froze seven of the company's bank accounts. Simultaneously, the National Prosecuting Authority (NPA) obtained a preservation order on Banxso's funds as investigations into fraud and potential money laundering deepened.Despite this, Banxso maintained it was no longer actively trading and would contest any liquidation attempts. The case escalated to the Western Cape High Court on 6 May 2025, where investor Carol Margret Wentzel formally applied to have the company liquidated. The hearing, presided over by Judge Le Grange, quickly delved into the complexities of the case.During the hearing, Judge Le Grange questioned why a settlement that would have secured Wentzel’s funds was rejected, casting doubt on her reasons for opting for liquidation instead. Her lawyers argued Banxso’s referral bonuses might render the business a Ponzi scheme under the Consumer Protection Act - a claim that appeared to confuse the court.In a legal turn, Banxso’s attorneys sought to exclude FSCA documents, claiming they were obtained through an invalid subpoena. Judge Le Grange resisted, pointing out that the evidence had already impacted proceedings and removing it could disadvantage the applicant.The hearing also underscored the inherent risk of Contract for Difference (CFD) trading. The judge acknowledged that while losses are expected in such markets, they don’t automatically imply fraud. Still, the case hinges on allegations of aggressive sales and unlicensed advice by Banxso representatives.The outcome, expected this week, could have lasting implications for online trading oversight and investor safeguards in South Africa.

Banxso faces liquidation as deepfake scandal, fraud allegations, and regulatory crackdown intensify

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