Navigating online investment platforms

With the growing popularity of online investment platforms, spurred by advancements in digital financial services and the rise of crypto assets, the risk of exploitation of consumers and financial services providers (FSPs) has increased.

A recent case in point is Banxso, a Cape Town-based online trading group that, until recently, operated an online investment platform allowing consumers to purchase and sell financial products. On 4 July 2025, the Financial Sector Conduct Authority (FSCA) withdrew Banxso’s FSP license, following allegations of non-compliance with certain financial sector laws. The FSCA’s investigation was prompted by claims that customers were misled into investing via deepfake videos and social media advertisements featuring billionaire celebrities such as Elon Musk and Rupert Murdoch, purportedly endorsing Banxso. 

These customers were directed to register via Immediate Matrix on Banxo’s platform, a move Banxso claims occurred without its knowledge as a result of a “malicious attack”. Customers were then contacted by alleged Banxso agents promising substantial returns. While some initially earned profits, many subsequently suffered significant loss.

This article considers measures FSPs, and retail customers can take to protect themselves in the online investment space. 

Steps FSPs and CASPs can take

FSPs and crypto asset service providers (CASPs) can reduce their exposure to risks through the following actions:

1. Regularly review internal policies and procedures to assess whether the entity is meeting its fitness and propriety requirements.
2. Where the compliance function is outsourced, implement clear, robust control measures to assess performance and clarify the role of the outsourced provider.
3. Regularly stress test internal frameworks to ensure service delivery meets standards of honesty, integrity and good standing.
4. Maintain a robust and responsive complaints management framework to identify improper or deceptive use of the FSP’s name, branding, or identity of key persons.
5. Establish clear reporting lines to ensure concerns, particularly around misappropriation of identity or brand, are escalated promptly to the FSCA or other competent authorities.
6. CASPs should ensure operational frameworks are tailored to the specific nature of crypto asset businesses.
7. Develop and implement a cybersecurity strategy that includes prompt cyber incident reporting to the FSCA.
8. Ensure that all advertisements (whether internally produced or third-party generated) are accurate, balanced and not misleading.
9. Ensure there is a robust complaints framework, so that complaints received from members of the public are handled in a timeous and comprehensive manner. 

Despite these precautions, the risk of illicit use of a FSP or CASP’s name or likeness remains. Vigilance and foresight are therefore essential.

Steps retail customers can take

Retail customers should take the following steps to guard against investment scams:

1. Verify that the FSP or CASP is authorised for the financial services it offers by checking its registration on the FSCA’s website through the FSCA’s public search functionality of FSP registrations.
2. Treat any offer promising disproportionately high returns with suspicion, if it seems too good to be true, it probably is.
3. Be alert to coercive tactics, such as persistent requests for further investment, which may signal fraud.
4. Submit complaints to the FSCA or, where applicable, the National Financial Ombud Scheme (NFO), which outlines the complaint process and participating FSPs on its website.
5. Customers should carefully review and assess the FSP or CASP’s terms and conditions, and understand the risks of investing in financial products, particularly those promising high returns.
6. Familiarise yourself with the Treating Customers Fairly (TCF) principles to understand your rights as a consumer. The FSCA’s MyMoney Learning Series is a helpful online resource.
7. Where advertisements feature prominent individuals, verify with the FSP or CASP whether the endorsement is legitimate. Customers can also report suspicious advertisements to the FSCA.

As a lay person, investment products and the world of online investment platforms can seem daunting. Dishonest conduct and precarious investment opportunities are becoming increasingly prevalent. It is important to exercise caution and consideration, and to know where assistance can be sought. Modern investment is evolving at a pace that outstrips the development of regulatory frameworks. This makes it is increasingly difficult to regulate newer, novel forms of investment and online platforms. Financial products are now more complex, and globalisation has opened markets beyond traditional geographical borders. There is also a growing cyber security risk, with customers and FSPs or CASPs facing threats such as scams, data breaches, and hacks. The measures outlined above can assist in safeguarding against improper and deceptive practices. In doing so, FSPs and CASPs can minimise their exposure to risks, and customers can better protect their hard-earned funds.