The FSCA is delving into the operations of Cape Town-based Banxso, a contracts-for-difference (CFD) trading platform under fire for allegedly capitalising on deepfake advertisements starring Elon Musk and prominent business figures.
The Authority announced last week it has initiated an investigation into possible contraventions of financial sector laws by Banxso after numerous complaints regarding its conduct. The Authority deemed these complaints worthy of further examination. However, it emphasised that the investigation is still in progress, and the FSCA has made no findings to date.
“The FSCA records that Banxso is co-operating fully with the investigation,” the Authority said.
The logo of a somewhat dodgy company known as Immediate Matrix is featured on many of the fake ads. Last December, the FSCA cautioned the public against doing financial services business with Immediate Matrix.
The Authority stated that it had noticed that Immediate Matrix was using images of famous people such as Musk and Patrice Motsepe in its ads and marketing. The FSCA said it suspected that Immediate Matrix might be using these famous faces without their permission, a so-called deepfake.
In February, Moneyweb reported that Banxso seemed to be profiting from these deepfake schemes. According to Moneyweb’s investigation, people who responded to the ads and signed up on Immediate Matrix platforms were quickly enrolled as Banxso customers.
Shortly after the story broke, Banxso issued a press release stating that it had filed a formal complaint against Moneyweb with the Press Ombudsman, citing its opposition to what it considers unfair reporting.
The company, licensed by the FSCA as a Category I FSP (No. 37699), has consistently denied any involvement with the deepfake advertisements or the Immediate Matrix scam that began circulating on social media platforms in November last year.
While the company admits that the ads led some unsuspecting people to its website, Banxso asserts that Immediate Matrix registered these investors on the Banxso platform without its consent as part of a cyberattack.
It also states that Banxso does not pay for leads from Immediate Matrix and “utilises other methods for client acquisition”.
In a Q&A interview with BizNews, Banxso claimed that Immediate Matrix intentionally abused the trust of reputable platforms such as Banxso. In the interview, the company explained that Immediate Matrix aimed to deceive people by falsely associating itself with Banxso’s secure trading environment to attempt to gather sensitive financial information during account creation on Banxso’s platform. Additionally, Immediate Matrix targeted victims after they created their accounts, offering a fake automated trading bot promising financial success, Banxso said.
Many investors who clicked on the ads have revealed significant losses, totaling millions of rands. According to BizNews, about 150 victims of the deepfake scam stepped forward after Advocate Petra van Niekerk spoke out in an interview with BizNews in which she shared her experience of losing her life savings.
Van Niekerk, who went on to represent other victims, has reportedly been fully reimbursed by Banxso.
Banxso told BizNews that the precise number of victims Banxso has identified and to whom restitution has been offered is under ongoing evaluation and subject to confidentiality constraints.
The company said it was in the process of “assisting affected individuals on a case-by-case basis, offering support and restitution where it is within our capacity to do so and where involvement through Immediate Matrix or similar schemes is evident”.
The FSCA has asked affected members of the public or investors who have any information regarding this matter to contact the Authority.
The Authority asks that any relevant information that could assist the FSCA with its investigation be included in the email. Those who wish to respond can send an email to EnforcementComplaints@fsca.co.za, with the subject “Banxso Investor”.
Banxso is as trustworthy as they claim to be.I paid R104800 for trade and they promised to look after my money and when I tried to do a withdrawal of R23000 they told me to cancel it so we can trade further before I could withdraw. I had 3 success managers who would call me now my account is zero I have nothing and they refuse to refund my money because they traded on my behalf. Banxso can see your password even if you change it.I want a refund, I can’t do business with them anymore
I agree! Read the articles on Moneyweb.