[SINGAPORE] As at Friday (Mar 21), all redemption requests that Chocolate Finance received between Mar 10 and the 1 pm cut-off on Mar 18 have been successfully paid out, said the wealth investment firm.
“All customers who have received their withdrawals have received 100 per cent of their capital invested, together with all their earned returns,” stated the firm in its latest update.
The fund manager, which was enjoying large inflows of funds due to its attractive rates on deposits, abruptly halted instant withdrawals on Mar 10, due to “high demand”, sparking alarm among investors. It also paused transactions on its debit card.
Before the suspension on Mar 10, customers could request instant withdrawals of up to S$20,000 a day.
The firm said that liquidity issues were not the reason behind the pause in instant withdrawals. Instead, it was a “matter of managing increased transaction volumes”.
Going forward, Chocolate Finance will continue to process all withdrawals within three to six business days, as it has done since Mar 11.
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In a LinkedIn post, founder and chief executive Walter de Oude noted: “Chocolate fronts the cash before receiving settlement (T+2 days). A withdrawal spike can deplete our liquidity buffers, requiring a temporary pause.”
The firm also explained that, as with asset managers, the underlying funds it invests in typically follow a three to six business-day withdrawal cycle.
On instant withdrawals and when they will resume, Chocolate Finance told The Business Times that it is unable to commit to a specific timeline, but emphasised that the pause in instant withdrawals is temporary.
The Monetary Authority of Singapore (MAS) said on Mar 12 that it continues to engage with Chocolate Finance “to ensure that all customer withdrawals will be met in an orderly fashion”.
MAS said: “Digital advisers are required to segregate customer assets from their own. In particular, customers’ assets and monies must be held in independent custody by custodians licensed and regulated by MAS.”
It further added that customer monies “must remain intact” and cannot be used to meet the liabilities of the digital adviser at any time.
Online personality Seth Wee, who blogs about finance matters, posted a video on Mar 9, announcing that he took out his money from Chocolate Finance.
Similarly, content creator Kelvin Tan, who makes investment-related videos, posted a video on Mar 10 about his reasons for withdrawing from Chocolate Finance.
A few days after Chocolate Finance’s meltdown unfolded, both financial influencers uploaded videos on Mar 16, apologising to viewers for the “poor communication” and the “panic and discomfort caused”.
