Court orders liquidation of Banxso, citing ‘deception’ and an illegal business model

Key topics:Court orders Banxso's liquidation for fraud and illegal operationsPensioner lost R500,000 after being lured by deepfake investment adFSCA found fake LPs, misused funds, and crypto transfers to owners.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..BizNews Reporter.The High Court has ordered the provisional winding-up of the financial services provider Banxso (Pty) Ltd, following a damning judgment that found its business model to be illegal and designed to defraud investors. The ruling came after a pensioner, Mrs. Carol Margaret Wentzel, who lost approximately R500,000 of her life savings, brought an application to liquidate the company, describing it as a "criminal enterprise."The case paints a grim picture of high-pressure sales tactics, misleading advertisements, and the misappropriation of client funds, culminating in the court's decision that it would be "just and equitable" to wind up the company..The Pensioner's Story: Lured by a Deepfake Promise.At the heart of the application was the devastating experience of Mrs. Wentzel, a 60-year-old pensioner. Her journey began in July 2024 when she encountered an online advertisement featuring a "deepfake" video of a supposed SABC interview with Elon Musk. The ad promoted an investment platform called ‘Immediate Matrix,’ promising investors they could turn a R4,700 deposit into R34,300 within a week.After registering her details, Wentzel was immediately contacted by an agent from Banxso. Assured she was investing in the advertised opportunity, she was assigned a "success manager" who guided her trades. Completely reliant on this advice, she initially invested R1,800 and saw a quick paper profit of R900. Encouraged, and under increasing pressure from her success manager, she invested a further R470,000. For a short time, her online platform showed continuous profits, reassuring her that her savings were in good hands.The illusion shattered in late September 2024 when she noticed her account's margin levels were low. When she tried to withdraw her funds, her success manager dissuaded her, instead offering a "recovery bonus" of R45,000. However, a contrived issue with submitting a form via WhatsApp instead of email was blamed for the bonus not being processed in time. That same evening, she received notifications that her entire capital investment had been wiped out in trading losses. When she sought answers, she was told to deposit another R500,000 to recover her losses..Banxso faces liquidation as deepfake scandal, fraud allegations, and regulatory crackdown intensify.Banxso’s Defence Crumbles Under Scrutiny.In its defence, Banxso vehemently denied the allegations. It claimed to be a legitimate Financial Service Provider (FSP) operating a "Straight Through Processor" model, acting merely as an intermediary between clients and offshore Liquidity Providers (LPs). Banxso argued that it was commercially solvent, with over R26 million in its operational account, and even offered to place the full claimed amounts of Wentzel and over 7,000 other intervening investors in trust, pending legal action.However, a forensic investigation by the Financial Sector Conduct Authority (FSCA), whose findings were central to the judgment, systematically dismantled Banxso’s claims. The FSCA, which had already withdrawn Banxso’s FSP license in July 2025, presented damning evidence:Sham Liquidity Providers: The three offshore LPs named by Banxso were all beneficially owned by Banxso's sole shareholder, Mr. Sekler. Investigations revealed these entities were not properly licensed or equipped to provide liquidity services.Misappropriation of Funds: Of the R880 million received from clients between January 2022 and April 2024, only two payments of R100,000 each were made to an LP. Instead, client funds were co-mingled with business funds and used for operational and personal expenses, including payments to Woolworths, Pick n Pay, and hotels.Conversion to Cryptocurrency: Over R615 million was transferred to crypto asset service providers, not to pay LPs, but to purchase cryptocurrency (USDT) that was then moved to Banxso’s own crypto wallets. The court noted this amounted to a profit of nearly R1 billion "pocketed from the misfortunes of Banxso's clients.".Caught in a scam: How Banxso lured an investor into a financial trap.A Model Built on Deception.The court found that Banxso not only benefited from the fraudulent "Immediate Matrix" deepfake scheme but that its entire business model was a sham. The judge concluded that Banxso was not an intermediary but was effectively acting as the counterparty to its clients' trades, directly profiting from their losses by manipulating trading rates.Perhaps most shocking was the revelation that after its license was suspended, Banxso continued to allow clients to trade in what it described as a "simulated" or "demo" environment, without informing them. The court labelled this a "deception in the true sense of the word," as clients were led to believe they were conducting live trades while their funds were not being processed.Finding that Wentzel had established on a prima facie basis that Banxso's business was illegal, the court ruled that her claim to recover her funds under the condictio ob turpem (a claim to recover money paid under an illegal contract) was valid. The judge dismissed Banxso's offers of security as insufficient to overlook the fraudulent nature of its operations and granted the provisional winding-up order, paving the way for liquidators to take control of the company’s affairs..Download and read the full court judgment below.Download and read Banxso's full statement below

Court orders liquidation of Banxso, citing ‘deception’ and an illegal business model

Related Stories

Ivo Vegter: ConCourt strikes down healthcare “Certificate of Need” laws

Francois Rossouw - “Lying” Steenhuisen faces big damage claims from farmers

Jaltech launches spin-off fund following successful Section 12J era

Understanding Death Benefit Allocation in SA Retirement Funds