WhatsApp and Telegram signal groups

Signal groups and investment clubs on WhatsApp and Telegram often sell advice. Advice sold in a group needs a licence just like advice given in an office. A screenshot of profits is not a record. This page explains what to ask the group admin.

Advice in a group is still advice

The law does not care where advice is given. If someone in a WhatsApp or Telegram group tells you to buy or sell a crypto asset, and they are doing it as part of a business, they are giving financial advice. That requires an FSP licence.

A group admin who charges a subscription for signals is giving advice for reward. That is a business. The admin needs a licence. If the admin says the group is 'just for education', ask if they are paid. If they are, they need a licence.

Why a licence matters in a group

A licence means the provider is subject to the FSCA's rules: fit and proper requirements, disclosure duties, and a complaints process. An unlicensed group admin has none of those. If the advice is bad, you have no recourse to the FAIS Ombud.

The licence also means the provider has a compliance officer and must keep records. That gives you a place to complain and a record to point to. An unlicensed group has neither.

How to ask a group admin for an FSP number

Ask the admin directly: 'What is your FSP number?' If the admin refuses, or gives a number that does not check out on the FSCA register, that is a red flag. A licensed financial services provider must display its FSP number on all communications.

Check the number on the FSCA register. Look at the licence categories. Does the category cover advice on crypto? If not, the admin is not authorised to give that advice.

Why a screenshot of profits is not a record

A screenshot of profits is not a record. It can be edited, taken from another account, or from a demo account. It does not show the losses, the fees, or the risk. A real record is a statement from a licensed provider, showing all trades and all costs.

If the group admin posts screenshots of profits, ask for a statement. A licensed provider can give you a statement from its own system. If the admin cannot, that is a red flag.

Investment clubs and pooled money

Some groups call themselves investment clubs. If the club pools money to invest, the person managing the pool is managing a collective investment scheme. That requires a different licence from the FSCA, and often registration as a collective investment scheme.

If the club trades with your money at their discretion, that is discretionary management. The same licence requirement applies. Ask for the FSP number and the category. If they cannot show it, do not give them money.

What to have in hand before deciding

Before you act on advice from a group, have the admin's FSP number and check it. Ask for the licence category. Ask for a written record of the advice. Ask about fees. Ask who holds your money.

If the group asks you to send money to an offshore account, exchange control applies. The bank will ask questions. Do not send money to an individual's personal account. That is a red flag.

A screenshot of the FSP number is not proof of licensing

A screenshot from the FSCA register can be altered or taken out of date. The only reliable check is to open the register yourself and search by the exact FSP number or legal name. A group admin who shows a screenshot but refuses to give the number is not giving you a way to verify the record. The register is public and free to search.

The FSCA register shows the date the licence was last updated. A screenshot taken months ago may not reflect a suspension or withdrawal. A firm can lose its licence after the screenshot was made, and the admin can still circulate the old image. Always read the live entry, not an image passed around in a group.

Some groups show a certificate of registration from a company registry, not an FSP licence. Company registration is not the same as being authorised to give financial advice. A close corporation or private company can be registered with CIPC and still have no FSP licence at all. The FSCA register is the record that matters for advice.

The admin's personal trading success does not authorise them to advise you

A person can show profitable trades in their own account and still be unlicensed to advise others. The law does not require a person to be profitable to get a licence, and it does not make profitability a substitute for one. Advice to the public is a regulated activity regardless of how well the adviser trades for themselves.

A signal group often presents the admin's own trades as proof they know what they are doing. But personal success is not a category on the FSCA register. The register records whether a person is authorised to give advice, not whether their strategy works. A good personal record does not turn an unlicensed person into a lawful adviser.

Even a licensed adviser can give bad advice and lose money. The licence means the person met the FSCA's fit and proper requirements at the time of approval. It does not guarantee future performance. Checking the licence is a starting point, not a promise that the signals will make money.

Paying a subscription to a group does not make the advice legal

A payment does not change the licensing requirement. Charging for advice without an FSP licence is a breach of the Financial Advisory and Intermediary Services Act, even if the service is sold as a subscription or a once-off fee. The payment does not create an exemption from the law.

Some groups call the payment a 'membership fee' or 'donation' to avoid calling it advice. The FSCA looks at what the group actually provides, not what the payment is called. If the group gives recommendations on what to buy or sell, that is advice, and the person giving it needs to be licensed, regardless of the label.

A subscriber who pays an unlicensed group has no recourse to the FSCA's complaints process in the same way. The FSCA can act against the unlicensed person, but it cannot order them to refund you unless there is a separate legal basis. Paying for advice from an unlicensed person is a risk that the law did not intend you to take.

A group that only reposts signals from another source still needs a licence

Reposting signals does not avoid the need for a licence if the reposter is acting as an intermediary. The FAIS Act covers any person who acts as a go-between between a client and a financial product. A group admin who passes on buy or sell calls is providing an intermediary service, even if they did not create the calls themselves.

The original source of the signals may be licensed, but that licence does not flow through to everyone who reposts them. Each person who gives advice or acts as an intermediary needs their own licence. A chain of reposters does not inherit the licence from the person at the top.

A reader who follows a reposted signal has no way to know if the original was accurate or authorised. The reposter may have altered the signal, added their own commentary, or left out important disclaimers. The only safe position is to require the reposter to show their own FSP number, not the number of the original source.

A group's disclaimer that it is 'not financial advice' does not change the legal position

A disclaimer does not determine whether the group is giving financial advice. The law looks at the substance of what is said, not the label placed on it. If the group tells members to buy a particular crypto asset at a particular time, that is advice, even if the message starts with the words 'this is not financial advice'.

The test is whether the group makes a recommendation that a reasonable person would see as advice. A disclaimer may be a factor, but it is not decisive. The FSCA has stated that it will look through disclaimers to the actual content of a communication.

A group that gives specific entry and exit prices is giving advice, no matter what it calls itself. The disclaimer may protect the group from a particular legal claim, but it does not remove the licensing requirement. A reader should ignore the disclaimer and ask for the FSP number instead.

The FSCA can act against an unlicensed group, but that does not get your money back

The FSCA can investigate and take enforcement action against an unlicensed person giving advice. This can include a fine, a directive to stop, or a referral for criminal prosecution. The FSCA's action is about protecting the public, not about compensating individual investors.

A reader who has lost money to an unlicensed group cannot expect the FSCA to recover their funds. The FSCA does not have a compensation fund for losses from unlicensed advice. The reader may have to pursue a civil claim, which is expensive and slow, and the unlicensed person may have no assets.

This is why checking the licence before paying any money is essential. Once the money is gone, the chances of recovery are low, even if the FSCA later acts. The best protection is to refuse to deal with a group that cannot show a live FSP number on the FSCA register.

A group admin who says they are 'registered' may mean something else entirely

The word 'registered' can mean many things. A group admin may be registered for tax, registered with a company registry, or registered on a social media platform. None of these is the same as being licensed by the FSCA to give financial advice. The only registration that matters for advice is the FSCA's register of authorised financial services providers.

An admin may say they are 'registered with SARS' or 'registered as a business'. These are not licences to give advice. A business can be registered for tax and still be completely unlicensed to advise on crypto assets. The reader must ask specifically for an FSP number and check it on the FSCA register.

The FSCA register is the single source of truth for whether a person or firm is authorised to give advice. A group admin who avoids the question or gives a number that does not appear on the register is not licensed. The reader should treat that group as unlicensed, no matter what other registrations they claim.

A signal group that asks for a management fee is no longer just a chat room

The moment a group charges a fee to copy its trades, the arrangement shifts from casual conversation to a financial service. A fee can be called a subscription, a tip, or a donation, but the law looks at what the payer gets in return. If the payer expects the group's calls to guide their own trades, that is advice or intermediary service, and it needs an FSP licence. The name of the payment does not change the nature of the service; the promise of guidance does.

A group that pools money from members and then trades on their behalf has crossed into discretionary management. That requires a different licence category, one that allows the holder to make investment decisions for clients without asking permission for each trade. A group that does this without the right category is operating outside the register, even if it shows an FSP number for something else. The reader should ask which category the FSP number covers, not just whether a number exists.

The FSCA register shows the categories each firm may use. A category for advice does not cover managing a pooled account, and a category for intermediary services does not cover holding client funds. When a group asks for money to trade on the members' behalf, the reader should look for a discretionary licence category. If the group's FSP number has no such category, the offer does not match the licence. That mismatch is a signal the reader can verify without relying on anyone's promise.