Deepfake Rupert, Musk ads used to steal R1 billion -…

South Africa's Financial Sector Conduct Authority (FSCA) has concluded a major investigation into the online trading platform Banxso, resulting in a R2 billion ($123 million) fine and long-term industry bans for its leadership. The regulatory action follows the discovery of a sophisticated fraud scheme that utilized deepfake advertisements of billionaires Johann Rupert and Elon Musk to misappropriate approximately R1 billion ($61.5 million) from South African investors.

What happened

The scheme relied on deepfake video advertisements that featured high-profile figures Rupert and Musk promising monthly returns of up to R300,000 on initial investments of R4,700. These deceptive ads promoted a platform branded as "Immediate Matrix." Once individuals responded to the advertisements, they were redirected to Banxso representatives who pressured them to trade in high-risk contracts for difference (CFDs), which the FSCA deemed unsuitable for most retail investors.

Investigators determined that Banxso was either directly involved in or materially benefited from the dissemination of these deepfakes. Rather than being placed with legitimate liquidity providers, client funds were commingled and moved between non-designated accounts, making them difficult to trace and ultimately using them for personal and business expenses. While Banxso and its representatives claimed they were victims of hacking, the FSCA found the misconduct to be systemic and serious.

As a result of the investigation, the FSCA withdrew Banxso's financial services provider license and imposed 30-year debarments on directors Harel Adam Sekler, Warwick David Sneider, Manuel de Andrade, and Mohammed Bux, with an additional 10-year debarment for Henry James Simpson. The Western Cape High Court subsequently ruled the firm's business model illegal, initiating liquidation proceedings. The FSCA has referred the evidence to the Directorate for Priority Crime Investigation (the Hawks) for potential criminal prosecution, while legal challenges regarding the penalties and debarments remain pending.