Deepfakes: Firm loses its licence

Banxso, which allegedly profited from adverts purporting to feature public figures, said that it would take legal action to oppose the decision by the financial watchdog

- Lyse Comins

The Financial Sector Conduct Authority (FSCA) has revoked the financial services provider licence of Banxso, marking an escalation in its regulatory action after receiving consumer complaints about the business.

However Banxso, which offers investments to the public via online trading platforms, said in a statement it intends to mount a legal challenge to the financial watchdog’s decision.

The final withdrawal, following a provisional suspension on 15 October, was confirmed after the FSCA reviewed preliminary investigation findings and Banxso’s submissions, the financial watchdog said on Friday.

“The FSCA is of the view that Banxso contravened various financial sector laws in a material manner and that it no longer meets the fit and proper requirements to be a financial services provider,” it said.

“The investigation findings included that Banxso, inter alia, misappropriated client funds, provided false and/or misleading information to clients and to the FSCA and did not act in the best interests of clients.”

The matter relates to a deepfake controversy which erupted last year with allegations that Banxso profited from deceptive ads featuring fakes of public figures Elon Musk, Johann Rupert and Leanne Manas. The ads promised lucrative returns but investors made substantial losses. Banxso has repeatedly denied involvement with the deepfake adverts.

The company disputed the FSCA’s decision, saying it would be exercising its full right of recourse under the Financial Sector Regulation Act, including applying to the Financial Services Tribunal for reconsideration.

“The company is also undertaking a comprehensive legal review of the procedural and factual aspects underpinning the FSCA’s decision.