New names, same players

RED FLAGS: BANXSO, AFRIMARKETS REBORN UNDER DIFFERENT BRANDS?

- Ryk van Niekerk

The banned contracts-for-difference (CFD) platforms Banxso and AfriMarkets may have had their licences withdrawn or suspended, but their business model appears to be alive and kicking.

New operators continue to benefit from South Africans lured through fake social media ads that promise automated monthly returns of more than R500 000 from a once-off “investment” of as little as R4 300.

These platforms claim legitimacy by citing their Financial Sector Conduct Authority (FSCA) licence.

However, they offer high-risk CFD trading without disclosing that clients will be trading CFDs.

They also fail to warn that most people lose money on such trades and tell would-be investors that a “trading professional” will reduce risks and help them make profits.

Of even more concern is that the new operators appear to have multiple links to Banxso and AfriMarkets. Moneyweb exposed Banxso and AfriMarkets last year as benefitting from fake ads that lure clients to the platforms.

Court papers later revealed that thousands of investors collectively lost hundreds of millions of rands - possibly even billions.