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    HomeGovernance, Policy & Regulations ForumPolicy & Regulations ForumAlleged Involvement in Scam: Banxso Draws Regulatory Scrutiny in South Africa

    Alleged Involvement in Scam: Banxso Draws Regulatory Scrutiny in South Africa

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    Cape Town-based online trading platform Banxso finds itself under the regulatory microscope following allegations of fraudulent activities linked to deepfake scams involving prominent business figures like Elon Musk and Johann Rupert. The Financial Sector Conduct Authority (FSCA) of South Africa has initiated an investigation into Banxso (Pty) Ltd, a Category I financial services provider authorized by the FSCA (FSP number 37699), based on numerous complaints received regarding its conduct. The FSCA stresses that while the investigation is ongoing, no conclusive findings have been made thus far. Banxso has pledged full cooperation with the regulatory inquiry.

    Background

    Banxso, self-described as a ‘zero commission online trading platform,’ has been operating in South Africa since April 2022, offering various online and derivative trading services. Founded by Harel Sekler and Warwick Sneider, with Manuel de Andrade serving as the general manager and Mohammed Bux as a key individual listed on the FSCA website, Banxso has claimed rapid growth, reportedly signing up over 2,000 customers daily.

    The company garnered attention in December after the Financial Services Authority of Seychelles issued a scam alert, indicating that Banxso was not licensed or regulated to conduct business in the country. Banxso attributed this alert to an administrative error and asserted that corrective measures were being taken.

    Allegations and Investor Losses

    Recent investigations have revealed a concerning pattern: individuals responding to deepfake advertisements featuring Musk and Rupert are directed to Immediate Matrix platforms. Upon registration, these individuals are automatically enrolled as Banxso customers without their knowledge. Subsequently, numerous investors have reported substantial financial losses, with some cases involving millions of rands. The affected investors recount similar experiences: initial investments followed by losses, pressure to invest further to recoup losses, and aggressive tactics by Banxso representatives.

    Response from Banxso

    Banxso vehemently denies any association with Immediate Matrix or the fraudulent advertisements, characterizing the situation as a malicious attack intended to damage its reputation. The company asserts that registrations from Immediate Matrix platforms occur without its knowledge, attributing this to a form of clickjacking — a cyberattack aimed at tarnishing reputations.

    In response to inquiries, Banxso’s management highlighted proactive measures taken to address the situation, including legal actions against Immediate Matrix, public awareness campaigns, educational content dissemination, and regulatory cooperation.

    Regulatory Involvement and Next Steps

    The FSCA’s investigation into Banxso’s activities underscores the importance of regulatory oversight in safeguarding investors’ interests. As the inquiry progresses, stakeholders await further developments to ascertain the veracity of the allegations and ensure appropriate measures are taken to protect investors and maintain market integrity.

    Banxso’s commitment to regulatory compliance and transparency remains a focal point amid ongoing scrutiny. With the regulatory landscape evolving, collaborative efforts between financial authorities and market participants are essential to combatting fraudulent schemes and fostering trust in the financial markets.

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