South Africa financial regulator FSCA has announced that it has provisionally withdrawn the license of online broker Banxso (Pty) Ltd FSP 37699 (Banxso). South Africa’s Financial Intelligence Centre (FIC) has also placed a hold on seven Banxso bank accounts.

Banxso investigation

The FSCA issued a media statement back in mid April 2024 informing the public that it was investigating Banxso. At the time, the regulator stated that its investigation followed several complaints received by the FSCA in relation to the conduct of Banxso, and that it was of the opinion that the allegations should be investigated. The FSCA noted at the time that Banxso was cooperating fully with the investigation.

Banxso license suspension

Fast-forwarding six months to mid October, the FSCA said that it is provisionally withdrawing Banxso’s license 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 FSCA 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.

The FSCA emphasised that this is 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.

Banxso bank accounts held

The FSCA said that it brought this matter to the attention of South Africa’s Financial Intelligence Centre (the FIC). On 2 October 2024, the FIC intervened and placed a hold on seven Banxso bank accounts. 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). The National Director of Public Prosecutions successfully applied for a preservation order of the funds in the bank accounts on 14 October 2024, in terms of section 38 of the Prevention of Organised Crime Act, 1998.

About Banxso

Other than South Africa, the Banxso brand is operated from Cyprus via CySEC licensed Banxso Ltd (formerly known as XF Services Ltd), via website banxso.eu, as well as offshore from a Mauritius domiciled company Éclat Technologies Limited. Banxso recently inked an agreement to sponsor EFL football club Queens Park Rangers, becoming QPR’s Official Online Trading Partner. South Africa business news site Moneyweb recently found a connection between Banxso and former binary options scam operation Banc de Binary, via Banxso’s shareholder and director Harel Sekler. Moneyweb also claims that Banxso is defying its license suspension, reporting that it was able to complete several trades on a client’s account, demonstrating that the platform remains operational.