Banxso said that it targeted more digital-savvy South African millennials with a broad investment portfolio. Picture: Banxso website.
The Financial Sector Conduct Authority (FSCA) has provisionally withdrawn the financial services provider licence of trading platform Banxso after it made unrealistic returns to market its products to clients.
The company was also sanctioned for allegedly using deepfakes in its advertising campaigns.
Banxso targeted digital-savvy South African millennials with a broad investment portfolio, promising massive returns on investments.
The FSCA said it was also concerned about Banxso’s “aggressive and pressurised sales techniques” used by Banxso agents when selling financial products to customers.
These agents were also promising unrealistic returns and failing to conduct the required risk and need analysis before selling the products to clients.
The FSCA has sounded the alarm against this trading platform and also also brought the matter to the attention of the Asset Forfeiture Unit of the National Prosecuting Authority (the NPA).
The FSCA said that it has also brought this matter to the attention of the Financial Intelligence Centre (FIC) and asked them to freeze seven of Banxso’s accounts.
In early October, the FIC placed a hold on the Banxso bank accounts. The company took the matter to court and on October 8, the Western Cape High Court ruled against Banxso and the hold was maintained.
In April, the FSCA ordered an investigation against the company after receiving complaints from members of the public that Banxso possibly contravened financial sector laws in SA.
“Banxso was authorised by the FSCA as a Category I financial services provider. The investigation follows several complaints received by the FSCA about the conduct of Banxso and thinks that the allegations should be investigated,” the FSCA said.
The FSCA said back in April that leadership within Banxso was cooperating with the investigation.
On Wednesday, the FSCA said that it was concerned that there may be a risk of harm to clients and the general public if Banxso continued to operate as an FSP.
“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 explained.
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