South African Crypto Exchange Banxso Suspended for Misleading Statements and Alleged Deep Fakes

South Africa’s Financial Sector Conduct Authority (FSCA) on Wednesday temporarily revoked the financial services provider license of Banxso, a platform offering cryptocurrency trading, citing concerns that its marketing practices promised unrealistic returns to customers. This follows allegations that Banxso used deepfakes in its advertising campaigns and used aggressive sales techniques to pressure customers into investing without conducting proper risk assessments. The FSCA warned that Banxso could be linked to deepfake ads featuring well-known billionaires such as Elon Musk, Johann Rupert, Nicky Oppenheimer, and others. The ads allegedly lured investors and caused huge losses. Many customers said they experienced large losses after deciding to invest. Banxso denied any connection to the ads circulated on social media. The FSCA noted that Banxso agents often failed to conduct necessary risk and needs analysis before selling financial products, raising concerns about customer protection. In response to this disturbing practice, the FSCA has notified the National Prosecuting Authority’s (NPA) asset forfeiture unit and the Financial Intelligence Centre (FIC) and requested that seven of Banxso’s accounts be frozen. According to this request, the FIC froze Banxso’s bank accounts in early October. The company challenged the decision in court, but on October 8, the Western Cape High Court upheld the FIC’s decision. Meanwhile, on October 14, the National Director of Public Prosecutions (NDPP) obtained a preservation order for the company’s funds under the Prevention of Organized Crime Act. (Cryptonews)