Banxso Allegedly Misleads South African CFD Clients: Allows Trading with Suspended License

South Africa’s Financial Services Conduct Authority (FSCA) confirmed today (Tuesday) that it is aware of the allegations against Banxso, a local contracts for differences (CFDs) broker, for misleading clients about the reinstatement of its license. However, the broker’s license remains suspended.

“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 purposes,” the regulator stated in its latest announcement.

Unfreeze of Bank Accounts, but with Conditions

The FSCA suspended Banxso’s South African license last month due to concerns about the firm’s operational practices and potential risks to clients. Another local agency also froze the brokerage’s bank accounts.

However, a South African court has since unfrozen these accounts, leading the broker to claim it had won against the regulators.

Today, the FSCA clarified that the “Court ordered 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 [locally authorised] financial services provider.” Additionally, one of the conditions for the provisional withdrawal of the license is that the broker must transfer all its clients to another authorised broker.

The regulator further specified that Banxso itself cannot use the funds in its bank accounts.

Misleading Clients and Allowing Trades

Local news agency Moneyweb reported that it, along with the attorney leading a liquidation application against Banxso, has received complaints from the broker’s clients, who say they were misled into believing that trading and deposits could continue as usual.

The local publication also confirmed the claims by executing trades on the brokerage platform, which should not be operational given the suspended license.

As previously reported by Finance Magnates, Banxso began onboarding clients under its South African license in early 2022. The broker also holds licenses in other jurisdictions, including Mauritius, Vanuatu, Comoros, Cyprus, and Australia.

Meanwhile, the FSCA confirmed that it has interviewed witnesses who have verified the allegations against the broker and is now conducting a further investigation.

“The FSCA is also investigating statements from clients of Banxso who maintain that Banxso is continuing to conduct financial services business, despite the withdrawal of its licence,” the regulator added. “Information received by the FSCA indicates that clients are encouraged to commit more funds to Banxso to recover trading losses.”

Finance Magnates reached out to Banxso for comment on the allegations but has not received a response as of press time.

South Africa’s Financial Services Conduct Authority (FSCA) confirmed today (Tuesday) that it is aware of the allegations against Banxso, a local contracts for differences (CFDs) broker, for misleading clients about the reinstatement of its license. However, the broker’s license remains suspended.

“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 purposes,” the regulator stated in its latest announcement.

Unfreeze of Bank Accounts, but with Conditions

The FSCA suspended Banxso’s South African license last month due to concerns about the firm’s operational practices and potential risks to clients. Another local agency also froze the brokerage’s bank accounts.

However, a South African court has since unfrozen these accounts, leading the broker to claim it had won against the regulators.

Today, the FSCA clarified that the “Court ordered 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 [locally authorised] financial services provider.” Additionally, one of the conditions for the provisional withdrawal of the license is that the broker must transfer all its clients to another authorised broker.

The regulator further specified that Banxso itself cannot use the funds in its bank accounts.

Misleading Clients and Allowing Trades

Local news agency Moneyweb reported that it, along with the attorney leading a liquidation application against Banxso, has received complaints from the broker’s clients, who say they were misled into believing that trading and deposits could continue as usual.

The local publication also confirmed the claims by executing trades on the brokerage platform, which should not be operational given the suspended license.

As previously reported by Finance Magnates, Banxso began onboarding clients under its South African license in early 2022. The broker also holds licenses in other jurisdictions, including Mauritius, Vanuatu, Comoros, Cyprus, and Australia.

Meanwhile, the FSCA confirmed that it has interviewed witnesses who have verified the allegations against the broker and is now conducting a further investigation.

“The FSCA is also investigating statements from clients of Banxso who maintain that Banxso is continuing to conduct financial services business, despite the withdrawal of its licence,” the regulator added. “Information received by the FSCA indicates that clients are encouraged to commit more funds to Banxso to recover trading losses.”

Finance Magnates reached out to Banxso for comment on the allegations but has not received a response as of press time.

This post is originally published on FINANCEMAGNATES.

  • Related Posts

    CySEC Flags Multiple Unregistered Websites, With Bybit and VTMarkets Named

    The Cyprus Securities and Exchange Commission (CySEC) informs investors that several websites are not linked to any entity authorized to offer investment services or perform investment activities. It should be…

    Prop Trading: FunderPro to Introduce Futures

    Prop trading company FunderPro has announced plans to launch Futures services, the company announced on its website. In a notice, the firm opened a waitlist reportedly for exclusive access to…

    Leave a Reply

    Your email address will not be published. Required fields are marked *

    You Missed

    CySEC Flags Multiple Unregistered Websites, With Bybit and VTMarkets Named

    • November 14, 2024
    CySEC Flags Multiple Unregistered Websites, With Bybit and VTMarkets Named

    JPMorgan’s quants see upside for gold prices from here after Trump win

    • November 14, 2024
    JPMorgan’s quants see upside for gold prices from here after Trump win

    Nigeria plans $28 billion spending for 2025 budget, minister says

    • November 14, 2024
    Nigeria plans $28 billion spending for 2025 budget, minister says

    Gold prices fall on inflation worries; copper slips lower

    • November 14, 2024
    Gold prices fall on inflation worries; copper slips lower

    Master the Market with Hedge Fund Forex Strategies

    • November 14, 2024
    Master the Market with Hedge Fund Forex Strategies

    Mexico’s Sheinbaum to present constitutional safeguard for non-GMO corn in coming days

    • November 14, 2024
    Mexico’s Sheinbaum to present constitutional safeguard for non-GMO corn in coming days