Virtually all victims Moneyweb engaged with say the scammers were persistent, exceptionally ‘professional’ and ‘convincing’. Picture: Banxso website
A new “recovery” scam has surfaced, targeting former Banxso clients who lost significant sums of money on the controversial contracts-for-difference (CFD) trading platform.
Banxso has been found to benefit from fake celebrity billionaire advertisements on social media, which promise exorbitant returns of up to R300 000 a month on a nominal investment of around R4 800. Banxso has vehemently denied any links to the fake ads.
The Financial Sector Conduct Authority (FSCA) provisionally suspended Banxso’s trading licence in October last year and recently issued a public warning regarding this secondary scam.
It said: “The FSCA received complaints from members of the public who advised that they were contacted by persons claiming to be investigating Banxso and that they have located funds belonging to investors. These scammers falsely claim they represent legitimate entities and regulators, including the British Financial Conduct Authority [FCA].”
Since Moneyweb first reported on Banxso benefitting from fake online ads, 348 victims have come forward, collectively claiming losses of R220 million.
Moneyweb engaged with these victims, and around 100 responded, with 40 confirming that the scammers had contacted them.
The number could be higher as many people block unknown calls or use caller ID software.
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From Moneyweb’s interaction with investors, the scammers follow two broad approaches.
The first is that those who have lost money at the hands of Banxso are offered a refund. The scammers purport to represent reputable institutions such as the British FCA.
However, the money can only be refunded in cryptocurrency, and the victims must open a crypto wallet.
They then have to “activate” the crypto wallet by making a deposit into the account. The amount varies, but it seems to be around 10% of the amount to be refunded. In some cases, additional payments for “insurance against fraud” have also been demanded.
When a victim deposits the funds into their wallet, it is immediately paid to an anonymous account. In several cases, the scammers offer to assist the victims by linking the crypto wallet to their bank account via AnyDesk, software that allows a third party to take control of their computers. The scammers made significant payments from these accounts to third-party accounts on two occasions.
The second approach is very similar. The main difference is that the scammers claimed they represented credible blockchain companies and managed to trace the money Banxso “stole” from them. However, they claim that Banxso invested the “stolen funds” in bitcoin. The funds have grown significantly due to last year’s increase in bitcoin prices, and in some cases, they say, the money has grown substantially more than what was lost on the Banxso platform.
The most alarming aspect of both approaches is that the scammers are in possession of detailed personal information. This includes the victims’ full names, cellphone numbers, email addresses, and, in some cases, their Banxso account numbers – and the exact amounts of money lost.
Virtually all victims claimed the scammers had strong Eastern European or British accents and were persistent, exceptionally “professional”, and “convincing”.
From Moneyweb’s engagement with former Banxso clients who received the scam calls, only four were duped again, and additional money was lost. One lost R160 000.
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Moneyweb put detailed questions to Banxso regarding how the scammers were in possession of their former clients’ personal information.
Banxso responded through its attorneys, Hanekom Attorneys, which stated: “Our client has unequivocally not disseminated any personal information in respect of its clients to any third parties, nor have these records been subject to any known data breach.”
The letter furthermore stated that “following your allegations, and as part of its own internal monitoring, our client analysed its systems in this regard and can confirm that this is indeed the case”.
“In amplification of this, our client employs specialist third parties and various security protocols throughout its systems to ensure that all client information is gathered, stored and moved with encryption and two-factor security.”
Read Banxso’s full response here.
However, last year, Banxso acknowledged it was a victim of a cyberattack. In response to claims that it onboards individuals registering on fake ads as clients, the company said that third parties inserted leads directly into its platform without its knowledge.
ALSO READ: FSCA investigates Banxso agents’ claims that it ‘has been cleared’
In the legal letter and press release, Banxso suggested that its former clients’ personal information may have been compromised by a hack of a website set up by the law firm Mostert & Bosman.
The law firm launched the website in October last year to allow people who have lost money on Banxso’s platform to register to form part of a liquidation application.
“From a cursory consideration of the website, it is clear that this website does not employ robust security protocols and may well be susceptible to compromise through malware and other cyber-related attacks. It is likely that the information, in the form gathered by this website and allegedly used by scammers, was obtained by scammers through this platform,” Banxso’s press statement reads.
In response, Mostert & Bosman vehemently denied Banxso’s allegations, stating that its website is “very well secured and subject to regular penetration testing”. Craig Pederson of Peddy Tech, the website operator, also noted that the site had not suffered a breach or “penetration/hacking”.
To test Banxso’s claim, Moneyweb engaged its database of victims, and of the 40 people who claimed the scammers contacted them, 24 said they never registered on the liquidation website or were phoned before the site’s launch. Their information could, therefore, not have been compromised by the website.
Only seven were contacted after they registered on the website.
ALSO READ: Banxso agents allegedly mislead clients on licence status
Hanekom Attorneys’ legal letter also threatens Moneyweb with additional legal action.
This threat follows legal actions against Moneyweb and the author initiated by AfriMarkets, a company owned by Banxso’s owner (R10 million).
Banxso director Warwick Sneider (R13.25 million) and Oren Shabat Laurent, former CEO of Banc de Binary (R10 million), also issued summonses against Moneyweb and the author as well as GroundUp, because Moneyweb republished one of its Banxso articles.
Moneyweb and GroundUp are defending the claims.
ALSO READ: Banxso continues to take money despite banks freezing its accounts
Hanekom Attorneys also sent a strongly worded cease-and-desist letter to Moneyweb in November last year. The letter demanded that Moneyweb remove all articles related to Banxso, issue a public apology, and cease the publication of any additional articles.
The law firm stated that it was instructed to institute an application for an urgent interdict if the demands were not met. Moneyweb did not remove the articles, and Banxso never brought any urgent proceedings.
Following the legal threats, Banxso (R3 million) and Harel Sekler (R3 million), owner of Banxso and AfriMarkets, also issued summonses against Moneyweb and the author.
ALSO READ: The FIC busts Banxso
The current Banxso refund scam is reminiscent of events that followed the implosion of the infamous Banc de Binary binary options scam that operated worldwide in the 2010s.
Sekler was closely linked to Banc de Binary through his company BDB Services (Belize), which operated the website www.bancdebinary.com in multiple countries. Sekler has however denied any involvement in or link to Banc de Binary.
Banc de Binary was met with aggressive legal proceedings by American regulators and settled legal proceeds for $11 million, a significant portion for repayment to investors.
However, the US Securities and Exchange Commission (SEC) later warned of fraudulent refund scams from scammers purporting to represent the SEC who contacted Banc de Binary victims and offered to facilitate payments for fees.
Anyone who has lost money on the Banxso or AfriMarkets platforms, as well as current or former employees, is welcome to contact Moneyweb at ryk@moneyweb.co.za. All information will be treated strictly confidential.
This article was republished from Moneyweb. Read the original here.
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