In a significant move, South Africa’s Financial Sector Conduct Authority (FSCA) has frozen the bank accounts of Banxso, a well-known trading platform and sponsor of the national soccer team, Bafana Bafana, amid an investigation into misleading advertisements circulating on social media.
This decision follows an earlier action by the Financial Intelligence Centre (FIC), which froze seven of Banxso’s accounts earlier this month. After Banxso contested the FIC’s hold in court, the brokerage ultimately lost its case, leading to the continuation of the account freezes.
On Wednesday, the FSCA announced that it had provisionally revoked Banxso’s license to operate as a financial services provider. The regulator expressed concerns about potential risks to clients and the public if Banxso were allowed to continue its operations.
“The provisional withdrawal of Banxso’s license is based on preliminary findings from our investigations into the company’s activities, particularly its alleged connection to the Immediate Matrix deepfake advertisements,” the FSCA stated.
Many of the misleading ads promoting Banxso’s services prominently feature the logo of a mysterious company known as “Immediate Matrix.” The FSCA also raised alarms about the aggressive and high-pressure sales tactics employed by Banxso agents when marketing their financial products. Reports suggest that these tactics often include unrealistic promises of returns and exaggerated claims about potential losses for investors.
Additionally, the FSCA noted that Banxso had neglected to conduct essential risk assessments and needs analyses for clients before recommending specific financial products.
In response to the allegations, Banxso’s Chief Operating Officer, Manuel de Andrade, denied any affiliation with the misleading advertisements, stating, “Banxso has no connection with, nor involvement in, any deepfake ads that may exist on the internet.”
As the investigation continues, the fate of Banxso and its operations remains uncertain, highlighting the importance of vigilance in the trading and financial services landscape.