SINGAPORE – Financial services firm Chocolate Finance will process its customers’ withdrawals in an “orderly manner”, following a spike in withdrawal requests on March 10.
In a statement on March 12, the firm said that customers who have submitted withdrawal requests can expect to receive their funds within 3 to 6 business days from the time they made the request, in line with normal investment fund redemption cycles.
Chocolate Finance chief executive and founder Walter de Oude said that the platform is committed to providing a “secure and transparent” experience for its customers.
“While we have seen a spike in withdrawals, all are being processed in an orderly manner,” he said.
“We assure customers that their funds are secure, and withdrawals are proceeding as scheduled.”
The firm also noted that it continues to work closely with Allfunds – its licensed custodian – to ensure the “highest level of security, compliance and operational efficiency”.
Mr David Perez de Albeniz, chief executive at Allfunds Singapore, said that customer investment funds holdings are “completely segregated and ringfenced”, as required by Singapore’s regulations, which means that the safety of investment fund holdings is “assured”.
“Our robust custodian framework ensures that all investments remain protected and accessible to Chocolate in accordance with standard redemption processes,” he said.
Chocolate Finance on March 10 suspended instant withdrawals, citing high demand.
It said on its mobile app that it was experiencing an unusually high volume of withdrawal requests, so users making requests during this period would have to wait between three and 10 days to get back their money.
The platform operates under private company ChocFin and is licensed as a fund management service provider by the Monetary Authority of Singapore (MAS).
It is required to safeguard users’ money, which is separated from the company’s own finances using licensed custodian banks such as HSBC.
Though the platform invests in short-duration, fixed-income funds and money market funds through its managed account, its website states that it is not a money market fund.
A money market fund is one that invests in short-term debt securities and cash, and is considered a low-risk option for investors wanting to park their money for a short period of time.
Chocolate Finance is a platform that invests in a range of funds that include a money market fund, and does not have its own fund.
MAS said in a statement on March 12 that digital advisors are required to segregate customer assets from their own.
The central bank noted that customers’ assets and monies must be held in independent custody by custodians and regulated by MAS.
Customer monies must remain intact and cannot be used to meet the liabilities of the digital advisor at all times, it added.
“MAS notes the confirmation provided by both Chocolate Finance and Allfunds that these requirements have been fully met,” it said.
The regulator will continue to engage with the firm “to ensure that all customer withdrawals will be met in an orderly fashion”, it added.
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