The Western Cape High Court has placed Banxso (Pty) Ltd under final liquidation, bringing legal finality – at least in the winding-up proceedings – to a saga that began with deepfake-fuelled complaints and escalated into regulatory freezes, licence withdrawal, and a record administrative penalty of R2 billion.
In a judgment delivered on 2 March, Judge André le Grange confirmed the provisional winding-up order granted in August 2025 and held that the investor applicants – CFD traders on Banxso’s platform – had proved their case on a balance of probabilities.
The Court directed that the applicants’ costs, including the costs of two counsel, “shall be costs in the liquidation”.
The company’s affairs now fall under liquidation procedures, and creditors must prove claims through the statutory process – not through ad hoc “settlements” or selective security offers.
Grounds for liquidation
The applicants relied on three bases:
- Commercial insolvency;
- Just-and-equitable winding-up based on illegality and fraud; and
- Loss of substratum (the foundational purpose, core objective, or essential basis for which a legal entity or a legal relationship).
The judge identified these as the “primary grounds” advanced for final liquidation and found that Banxso’s position had deteriorated materially since the provisional order.
Read: Banxso will contest provisional liquidation order
Insolvency – and the Flamingo development
The Court recorded proven claims of R70 371 175, based on Banxso’s refund policy and its admission that after its licence was withdrawn, “trades were simulated and funds are repayable”.
It then added a further liability: a claim by liquidity provider Flamingo Clearing House for R67 239 005. This liability had not previously been disclosed, despite Banxso’s sole shareholder also being the shareholder of Flamingo.
With Flamingo included, “the total admitted liabilities exceed R137 million”.
Available bank funds were approximately R69.97m, leaving a shortfall of more than R67m.
The Court further noted that Flamingo approached the court ex parte, without notice to Banxso’s provisional liquidators, seeking authorisation for a commission of inquiry into Banxso’s affairs.
Banxso maintained it was solvent and offered security for certain claims. The Court accepted that security can be relevant in insolvency proceedings but found the solvency claim “highly questionable”, noting that Banxso had not traded legally since October 2024, had no employees or premises, and its trading platforms had been terminated.
The judge concluded that Banxso was “factually and commercially hopelessly insolvent”.
Illegality and fraud findings
Banxso argued it operated lawfully as a straight through processing broker, that enrichment from client losses accrued to offshore liquidity providers, that those entities were separate juristic persons whose corporate veil should not be pierced, and that Immediate Matrix was a “parasitic” cyber-attack from which it too suffered. It pointed to reimbursements exceeding R14m internal policy changes.
The Court held these submissions carried little weight against the Financial Sector Conduct Authority’s forensic analysis of its bank accounts. It described the evidence of alleged illegality and fraudulent conduct as “overwhelming”.
The regulator’s analysis, the Court found, provided compelling proof that Banxso’s business was not conducted as represented. It referred to the “co-mingling of funds”, the use of client money for operational expenses, and the “channelling of substantial sums into cryptocurrency wallets under its control, rather than to genuine, independent LPs”, which undermined the STP model.
The Court also examined Banxso’s relationship with Flamingo. It found that the connection to that related liquidity provider effectively rendered trading a zero-sum arrangement between the client and an entity under common control, which it described as “at first glance deceptive”.
Deepfake pipeline and misrepresentations
The judgment addressed the Immediate Matrix deepfake advertising scheme that first brought Banxso under scrutiny in early 2024.
The scheme involved social media adverts featuring fabricated or manipulated videos of prominent figures, including Elon Musk, promising extraordinary investment returns. Members of the public who clicked on the adverts were directed to platforms linked to Immediate Matrix, after which they were contacted by individuals presenting themselves as associated with Banxso and encouraged to deposit funds.
Banxso consistently denied any link to the scheme. It maintained that Immediate Matrix was a “parasitic” cyber-attack that redirected unsuspecting users to its website without its knowledge or consent. It argued that it did not pay for such leads, that it was itself a victim of the scheme, and that it had reimbursed more than R14m to clients identified as having come through the Immediate Matrix pipeline.
The Court rejected that characterisation. It found the link between the deepfake adverts and Banxso’s onboarding process “too direct, and too lucrative for Banxso, for it to plausibly claim the status of an innocent victim”, and recorded evidence that Banxso “knowingly benefited from this fraudulent marketing long after becoming aware of it”.
The judgment indicates that the flow from advert to onboarding was not incidental. Prospective investors who responded to the deepfake content were contacted by Banxso representatives who facilitated deposits and trading activity, mirroring the promises contained in the adverts.
The Court further found that representatives gave false information to clients regarding licensing and returns and continued solicitation after licence withdrawal.
It cited specific examples. One representative told an applicant he had been employed full-time by Banxso for five years, that Banxso held the same licence as a bank and paid 8.7% interest to clients, and there was no difference between Banxso and companies such as Sanlam, Capitec, and Absa.
Banxso conceded that after its provisional suspension by the FSCA on 15 October 2024, a representative informed a client on 8 November 2024 that the licence was no longer suspended, while another representative told a different client that Banxso anticipated resuming normal operations the following week.
The Court held that the applicants had advanced strong evidence of contraventions of financial sector laws, including operating without a licence and offering interest like a bank without registration.
Legal basis: unlawful agreements and enrichment
On the legal claim relied upon by applicants, the Court held that the requirements for condictio ob turpem were satisfied on a balance of probabilities, citing “multiple statutory contraventions and fraudulent misrepresentations”.
Regarding enrichment, the Court found that although Banxso argued liquidity providers benefited, the “related-party structure and the flow of funds to crypto wallets linked to Banxso’s operations” indicated that “the Banxso group, as a whole, was unjustly enriched at the expense of investors”.
The judge described the scale as “vast”, affecting “thousands of investors” and involving “hundreds of millions of rands”, and found Banxso’s regularisation efforts “unconvincing”.
Regulatory findings before the court
While preparing judgment, the parties filed further evidence confirming that the FSCA imposed administrative penalties of about R2bn on Banxso and two directors, Harel Adam Sekler and Warwick David Sneider, jointly and severally.
Further penalties included:
- R20m against director Manuel de Andrade; and
- R10m and R5m respectively against key individuals Mohammed Bux and Henry Simpson.
De Andrade and Bux were debarred for 30 years and Simpson for 10 years.
The Court recorded that the FSCA calculated penalties with reference to “the financial benefit that Banxso and its key persons derived from their unlawful conduct”.
Read: FSCA slaps Banxso and directors with record R2bn fine
Abuse of process argument rejected
Banxso again alleged that the liquidation was being driven by the applicants’ attorneys, and the process was tainted by touting or conflicts.
It argued the provisional winding-up order constituted an abuse of process and sought reconsideration of earlier findings relating to allegations against the applicants’ attorneys, Mostert & Bosman (M&B).
It alleged that the application was driven by M&B for financial gain, that M&B engaged in “touting” by creating a website to solicit Banxso clients, and a conflict of interest arose because the firm represented both provisional liquidators and creditor-clients whose claims were subject to scrutiny.
Banxso also argued that its offer of full security showed liquidation was not in creditors’ best interests, warning that liquidation costs could erode recoveries as allegedly occurred in the Mirror Trading International matter.
The Court held that although allegations concerning professional conduct are serious and may warrant scrutiny by relevant bodies, they do not invalidate substantive grounds for liquidation. It stated that each matter must be decided on its own facts, and the “primary concern” is whether the company should be wound up based on its financial position and conduct.
The judge held that the evidence of widespread illegality and fraud – much of it from independent regulators – existed “independently” of M&B’s conduct. If grounds for liquidation are established, the application should not be dismissed merely because there are allegations that attorneys advancing it may have ulterior motives. The appropriate remedy for any abuse lies in a cost order or professional discipline, “and not in allowing an allegedly unlawful enterprise to continue.”
The suggestion that earlier strike-out decisions be revisited was also found to be without merit.
Loss of substratum
The Court held that Banxso had lost its substratum. Its principal purpose was to operate as a licensed financial services provider, and with its licence withdrawn, operations ceased and the business became inactive. On that basis, the Court found it could no longer lawfully or practically conduct the business for which it was established.
Banxso argued otherwise. It maintained that its position was temporary and that it intended to pursue reinstatement of its licence through appropriate legal and regulatory channels. It also indicated that if the licence were restored, it would be able to realise value for creditors, including potentially selling its client book.
The Court was not persuaded that these prospects altered the present position. It found that the company’s ability to resume operations depended on future contingencies that had not materialised and might never do so. In those circumstances, the judge concluded that the company lacked a viable operational foundation and that this supported a final winding-up order.
Stakeholders signal further legal steps
In a statement issued after judgment, Banxso stakeholders said they respected the Court and the process, but “this development opens the door to further legal processes”.
They added: “Our position remains consistent. The protection of clients and the responsible safeguarding of stakeholder interests continue to guide every decision,” and said they would pursue “all lawful avenues available within the framework of South African law to ensure that rights are properly exercised and that the interests of affected parties are protected”.
The statement noted that the ruling may create uncertainty and said stakeholders remained “engaged, measured and focused on seeing this matter through every appropriate legal channel available”.
Effect of the ruling
The judgment does not determine criminal liability or final investor recoveries. It determines that the legal requirements for final liquidation have been met.
The matter now proceeds through formal liquidation, where claims will be proved and assets traced, investigated and distributed in accordance with insolvency law.
