Banxso vows to fight back after court orders provisional liquidation

Following a protracted legal battle, the Western Cape High Court has provisionally ordered the liquidation of trading platform Banxso (Pty) Ltd.

Handing down the ruling, Judge Andre le Grange questioned the legality of the Banxso’s business model, following accusations that pensioner Carol Wentzel lost over R500,000 through the platform.

However, in a statement issued to the media on Friday afternoon, Banxso said it vehemently disagrees with the ruling and said the company would fight it with the greatest of urgency.

The company said it would pursue all legal remedies, including appeals, stressing that the liquidation ruling would have severe operational, economic and social consequences for its employees, service providers and thousands of clients.

The statement said Banxso’s shareholders, board, and management are united in their determination to protect their clients, safeguard funds and restore stability.

“Our clients’ interests are of paramount importance,” a company spokesperson said.

“We will do everything necessary to secure a just and equitable outcome and prevent the dissipation of client funds.”

The ruling follows the withdrawal of Banxso's licence by the Financial Sector Conduct Authority (FSCA) in July, which some experts have described as "procedural persecution" and possibly one of the most controversial enforcement actions in South African financial services history.

The financial body has been accused of handing a corporate death sentence to Banxso despite its cooperation in matters related to alleged AI-powered scams.

According to reports, ⁠Banxso voluntarily refunded over R14 million to clients affected by sophisticated deepfake scams and  proactively upgraded its compliance systems and hired external forensic specialists. It also self-reported issues to the regulator and participated fully in investigations. It said no clients lost money due to company malfeasance – only to the same AI-powered scams plaguing the entire industry with the company taking on the loss through refunds to their clients.

"They have been punished for transparency," a senior industry source stated "Whilst they were busy fixing problems and protecting clients, other firms were perfecting the art of regulatory hide-and-seek. Guess who's still operating today?"

Banxso's official response to the FSCA's ruling was: "We are disappointed by the FSCA's decision, which in our view does not reflect the substantial engagements with and representations to the FSCA, together with the material improvements made to our systems and compliance frameworks.

"Banxso remains committed to the highest standards of client care and regulatory integrity, and will engage the available legal avenues to fully ventilate and defend its position."