Banxso Suspends EU Clients Amid Regulatory Scrutiny

Banxso suspends EU clients amid regulatory scrutiny, halting new account openings in Europe under its Cyprus licence restrictions. Banxso, a contracts for differences (CFDs) broker currently facing regulatory issues in South Africa, has ceased onboarding clients under its Cyprus Investment Firm (CIF) license, Finance Magnates has reported. The broker’s EU website also appears inactive, with most services suspended.

Banxso Suspends EU Clients Due to Cyprus Licence Issues

“We would like to inform you that Banxso Ltd, with Licence Number 413/22 operating under the name banxso.eu, is not accepting any clients at the moment,” reads a notice on Banxso EU’s website.

Although the company’s Cyprus license remains valid, archived pages from the Wayback Machine indicate that Banxso stopped onboarding clients in April of this year. The broker had previously onboarded only Cyprus residents before halting all services, as suggested by these archived records.

The risk disclosure on Banxso EU’s website is also notable for omitting the exact percentage of clients losing money on the platform, raising compliance questions for the Cypriot entity when it was still operational. “CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. The vast majority of retail investor accounts lose money when trading with CFDs. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money,” the website’s disclosure warns.

Banxso’s South Africa Troubles

While Banxso’s Cyprus division is no longer accepting new clients, its South African unit is also under scrutiny by the local regulator. Last month, South Africa’s Financial Services Conduct Authority (FSCA) suspended the broker’s license due to concerns over its operational practices and potential risks to clients. Additionally, another South African authority froze the broker’s bank accounts.

Although a recent court order lifted the freeze on Banxso’s bank accounts, allowing the broker to claim a partial victory, the FSCA clarified that this ruling included conditions. Specifically, the broker is barred from withdrawing or enabling the withdrawal of funds from the accounts, except for transferring clients to an alternative [locally authorized] financial services provider. Furthermore, its license remains suspended.

Many South African clients alleged that broker representatives misinformed them about the reinstatement of its license and the resumption of trading services. Local media confirmed that Banxso’s CFDs trading platform was processing trades even as its license remained suspended.

Meanwhile, the South African regulator has launched an investigation into the broker’s representatives, with witnesses corroborating allegations against Banxso.

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