By Ryk van Niekerk.
The Financial Sector Conduct Authority (FSCA) is investigating claims that Banxso agents are informing clients that its trading licence has been reinstated and its platform remains live.
This is despite the FSCA provisionally suspending Banxso’s licence on 16 October.
The FSCA issued a statement on Tuesday stating that Banxso’s licence remains suspended and that it would be illegal for Banxso to continue to operate a CFD trading platform.
Moneyweb confirmed that the platform remains live, as it successfully executed a CFD trade on Tuesday morning.
“The FSCA is aware of allegations that Banxso is contacting clients and advising them that it (Banxso) ‘has been cleared’, that its licence has been reinstated, and that it may render financial services. The authority has interviewed witnesses who have confirmed this and will investigate these allegations further.
“The FSCA is also investigating statements from clients of Banxso who maintain that Banxso is continuing to conduct financial services business, notwithstanding the withdrawal of its licence. The information received by the FSCA indicates that clients are encouraged to commit more funds to Banxso to recover losses made in trading.
The authority reiterates that Banxso’s licence has not been reinstated and that it cannot lawfully conduct any financial services business or receive any deposits from clients for such purpose,” the FSCA statement reads.
Several Banxso victims reported these claims and the lawyers who have initiated a liquidation application against Banxso.
Banxso did not respond to questions related to its agents’ claims or why its trading platform remains operational.
Banxso may not withdraw money from bank accounts
The FSCA also stated in its statement that the ruling by the Western Cape High Court lifting the preservation order also said that “Banxso shall not withdraw or allow the withdrawal of any funds in the bank accounts, other than for purposes of migrating clients to an alternative financial services provider that is authorised by the FSCA”.
The FSCA added that the “transfer of funds to an authorised financial services provider is required because Banxso’s FSP licence remains withdrawn, and as a result, Banxso cannot conduct any financial services business. Banxso itself cannot deal with the funds in the bank accounts that were preserved.
It is also a condition of the provisional withdrawal of Banxso’s licence that it must transfer all its clients to an authorised financial services provider. The FSCA is in discussions with Banxso to ensure an orderly transfer of clients, “the statement adds.
The FSCA also referred to the application for the liquidation of Banxso that was brought to the Western Cape High Court. It states that the attorneys of record are Mostert and Bosman and that enquiries should be addressed to pierred@mbalaw.co.za. The hearing of the liquidation application will take place on 4 December 2024.
A total of 280 individuals have contacted Moneyweb and claim they have lost more than R174 million. This article was republished from Moneyweb.