- The Financial Sector Conduct Authority (FSCA) has provisionally revoked Banxso's licence, a South African online trading platform, due to promises of unrealistic returns.
- The provisional withdrawal is based on preliminary investigation findings regarding the activities of Banxso and its possible association with the Immediate Matrix deepfake advertisements.
- This follows the regulator's media statement in April 2024 informing the public that it was investigating "potential violations of financial sector laws by Banxso."
Banxso has reportedly faced criticism for "benefiting" from deep fake advertisements featuring billionaires Elon Musk, Johann Rupert, and Nicky Oppenheimer. Numerous investors said to have clicked on these ads reported losing millions.
In the new statement, the FSCA confirmed it had taken this action due to concerns 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 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,” the authority said.
The regulator also emphasised that once the investigation is finalised, it will review the investigation and any submissions by Banxso. Banxso has been allowed to present reasons for potentially lifting the provisional withdrawal.
The FSCA reported the matter to the Financial Intelligence Centre (FIC), which intervened on October 2, 2024, and placed a hold on seven Banxso bank accounts under Section 34 of the Financial Intelligence Centre Act, 38 of 2001.
However, on October 4, 2024, Banxso approached the Western Cape High Court for an order lifting the hold on the bank accounts but the court ruled against Banxso and the hold was maintained.
Similarly, the FSCA brought the matter to the attention of the National Prosecuting Authority's Asset Forfeiture Unit. The National Director of Public Prosecutions successfully applied for a preservation order of the funds in the bank accounts on October 14, 2024, per Section 38 of the Prevention of Organised Crime Act 1998.
In January 2024, the authority warned the public to exercise caution when dealing with certain investment opportunities. It cited Livestock Wealth Financial Services (Pty) Ltd (Livestock FS) and Livestock Wealth (Pty) Ltd (Livestock Wealth), both subsidiaries of Livestock Wealth — an agri-investment startup — as outfits to be cautious of.
