The Western Cape High Court has ruled that Banxso should be placed into provisional liquidation, reports News24.

On Friday, Judge Andre le Grange said in his ruling that he was satisfied that the online platform’s business model was illegal. 

He added that a ‘handsome profit of just over R990m was pocketed from the misfortunes of Banxso’s clients’.

According to The Financial Sector Conduct Authority (FSCA), the sole shareholder of Banxso is an Israeli-based attorney, Harel Adam Sekler.

Earlier this year, the FSCA withdrew Banxso’s licence, saying it contravened various financial sector laws.

Banxso rose to prominence via high-profile sponsorships of Bafana Bafana and SA’s first UFC champion, Dricus du Plessis.

But customers started complaining that a series of AI-manipulated deepfake videos featuring figures such as Elon Musk had led them to sign up with the brokerage where they lost money.

Last year, notes News24, investor Carol Wentzel – who lost R500 000 on Banxso – launched a legal bid to have the online trading platform wound up, with her lawyer telling the court that the company’s ‘success managers’ played psychological games with vulnerable clients.

Banxso’s lawyers contended that Wentzel could not show that the entire business was unlawful or insolvent, with Banxso’s liquidity provider able to pay Wentzel and other creditors if their claims were proven. 

Le Grange found that the deepfake advertisements were designed to lure clients under false pretences to invest in products with a promise of unrealistic returns, and that Banxso’s agents gave investment advice to clients – which they were not allowed to do under the terms of Banxso’s licence as a financial service provider.

A Banxso spokesperson said on Friday that it noted ‘with disappointment’ the granting of a provisional liquidation.

‘The company firmly disagrees with the ruling and is treating this matter with utmost urgency, immediately pursuing all legal remedies, including appeals…’

Full News24 report

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