Investors who lost money with Banxso (Pty) Ltd are being targeted by scammers posing as investigators promising to recover their funds.
The FSCA has issued a public warning about individuals and entities claiming to assist investors in recovering losses from Banxso. The Authority reports receiving numerous complaints from people who have been contacted by these scammers. Posing as investigators, they claim to have located funds belonging to Banxso investors.
According to the FSCA, these fraudsters often use false identities, operate under multiple names, and falsely claim to represent legitimate organisations or regulators. Their tactics exploit victims’ desperation by offering to recover lost funds in exchange for upfront fees, but instead, they further defraud them.
This scheme, known as a recovery scam, typically involves unsolicited messages or calls in which scammers pretend to be affiliated with legitimate organisations or law enforcement agencies. They request personal information, advance payments, or access to bank accounts under the guise of providing assistance.
Banxso has faced scrutiny for its alleged involvement in deepfake ads featuring figures such as Elon Musk and Johann Rupert, which promised unrealistic returns and reportedly lured investors into financial losses. These ads were linked to Immediate Matrix (IM), a company flagged by the FSCA for fraud in December 2023.
The FSCA began investigating Banxso in March last year for potential violations of financial laws. By October, it had provisionally withdrawn Banxso’s FSP licence, citing client safety concerns. The FSCA shared its preliminary findings with the Financial Intelligence Centre and the National Prosecuting Authority, and while the investigation is ongoing, it is nearing completion.
Read: Banxso v FSCA over links to deepfake adverts
Banxso denies involvement with the ads but claims to have refunded 65 of the 70 affected clients, totalling just over R14.1 million.
However, more investors have come forward, suggesting that the number of victims is greater than initially reported.
On 25 October 2024, a former investor applied to the High Court to place Banxso under provisional liquidation. Mostert and Bosman (M&B) now formally represents 12 investors in the application, who collectively claim losses exceeding R68m.
The liquidation hearing has been postponed to 17 March 2025.
Pierre du Toit, an attorney at M&B, told Moonstone that several of their clients have reported being contacted by individuals offering to help recover their Banxso investments.
One such client shared that they were approached by a “transaction expert” who claimed to know of R300 000 that Banxso was allegedly holding, linked directly to the client’s Banxso account. The “expert” assured the client that he could return the money at no cost but insisted that he first needed to conclude the initial transaction before gaining access to the rest of the funds. He said the payment would be made in Bitcoin.
Du Toit said this is a typical modus operandi that is followed in investment scams.
“The obvious question is, of course, if the person who approaches the victim for purported assistance is not associated with the original scam, where did he get the details of the specific victim?”
There has been a significant global increase in recovery scams, In Australia, reports involving money recovery elements rose by 129% over six months, with total losses exceeding $2.9m.
Similarly, in Canada, recovery scams more than doubled in 2023, resulting in more than $1.6m in losses.
Experts have warned that scammers often target the same individuals repeatedly, posing as different companies. An article by The Scottish Sun revealed that three in 10 scam victims are defrauded multiple times.
Martin Richardson, senior partner at National Fraud Helpline solicitors in Scotland, said this seems to be a particular problem for people who have lost money through crypto investments.
“The fake firm seems convincing because they tell victims that they can see where the lost crypto money is.”
The FSCA urges the public to act with caution and avoid engaging with anyone offering unsolicited recovery services. Legitimate regulators or organisations do not request personal financial information or upfront payments to recover funds.
Warning signs include:
- Requests for personal or financial information.
- Demands for access to bank accounts or cryptocurrency wallets.
- Advance payments or fees for the purported recovery of funds.
To protect yourself from recovery scams:
- Be sceptical of unsolicited offers: legitimate organisations typically do not contact individuals out of the blue offering to recover lost funds.
- Avoid upfront payments: reputable recovery services do not demand advance fees.
- Verify identities: always confirm the credentials of individuals or organizations contacting you.
- Consult authorities: report suspicious contacts to local law enforcement or financial regulatory bodies.
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