Banxso’s Cyprus Exit: Regulatory Woes Deepen

Banxso’s Cyprus exit signals mounting regulatory troubles, as compliance concerns and licence suspension raise industry alarms. Banxso, the South African contracts for differences (CFDs) broker facing regulatory difficulties, has withdrawn from its retail operations in Cyprus. Regulatory filings indicate that Nova Securities Limited, a newcomer to the industry, has acquired its Cyprus unit.

In addition to its departure from Cyprus, Banxso is grappling with regulatory issues in South Africa, where it has been accused of misleading clients regarding the status of its licence.

Banxso’s Cyprus Exit Amid Compliance Concerns

The broker’s exit followed a decision to cease onboarding retail clients under its Cyprus licence several months ago. Banxso’s Cyprus unit completely halted client onboarding in April 2024. Notably, the broker had only onboarded Cyprus residents before discontinuing its services entirely, as confirmed by archived pages from the Wayback Machine.

Nova Securities has now acquired a Cyprus Investment Firm (CIF) licence, allowing it to provide financial services across the European Economic Area (EEA).

Nova’s website does not indicate any affiliation with Banxso and focuses on offering exchange-traded products (ETPs) and over-the-counter (OTC) fixed-income securities to institutional clients and high-net-worth individuals. It also emphasizes that it is “licensed to hold clients’ assets on their behalf and place them with internationally recognised and reputable global sub-custodians.” However, it remains uncertain whether the platform has begun onboarding clients under the Cyprus licence.

According to the Cyprus companies register, one of Nova’s five directors is Alexandra Niculescu, who has been serving as Executive Director at Nova since December 2022, as stated on her LinkedIn profile. She has also held positions at several other Cyprus-based companies, including a brief six-month role as an Anti-Money Laundering Compliance Assistant at Depaho, a firm that faced multiple regulatory actions for non-compliance. Additionally, she worked at Novox Capital, which operated a binary options brand and encountered regulatory scrutiny.

Banxso’s Regulatory Challenges

Meanwhile, Banxso’s South African division has encountered significant regulatory troubles. In late 2024, the country’s Financial Services Conduct Authority (FSCA) suspended the broker’s licence, citing concerns over its operational practices and the potential risks posed to clients. Furthermore, another local agency froze the brokerage’s bank accounts.

Recently, a local court lifted the freeze on these accounts, enabling the broker to declare a regulatory victory. However, the FSCA clarified that the ruling included specific conditions. It stated that regulators prohibited Banxso from withdrawing or allowing fund withdrawals unless transferred to a locally authorized financial services provider. Additionally, the broker’s licence remains suspended.

Several South African clients of Banxso alleged that its representatives provided misleading information regarding the reinstatement of its licence and the resumption of trading services. A local media outlet reported that the CFD trading platform continued to facilitate trade execution despite the suspension.

At the same time, the South African regulator has launched an investigation into the broker’s representatives. Witnesses have provided statements supporting the allegations. Furthermore, the broker is now facing a liquidation attempt.

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