Shorter wait time for Chocolate Finance cashouts following halt in instant withdrawals
Chocolate Finance has alsotemporarily implemented a S$250 per transaction spend limiton its debit card.
An email sent to Chocolate Finance customers on Mar 11, 2025.
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SINGAPORE: Chocolate Finance customers looking to withdraw their funds face a shorter wait of three to six business days instead of the 10-day timeframe that was earlier announced, the company said on Tuesday evening (Mar 11).
Concerns about the financial services platform emerged after itsuspended instant fund withdrawals on Monday due to "high demand", adding that withdrawals would take three to 10 working days before they are reflected in users' bank accounts.
Chocolate Finance founderWalter de Oude later said that the withdrawal issues can be traced back to customers "gaming" its miles reward system.
In an email update on Tuesday, the company said a shorter wait time of three to six business days follows "the usual industry practice".
"Like most asset managers, the underlying funds we invest in typically follow a three to six business-day withdrawal cycle," the financial services platformsaid.
Until now, the company has been able to offer instant withdrawals up to S$20,000 "through our unique liquidity programme", Chocolate Finance said.
According to the company, it fronts withdrawals from its own funds first before getting reimbursed when the funds settle.
"That said, when we get a spike in withdrawals, we pause this programme and let funds settle in the same way your withdrawals above S$20,000 usually do," the company added.
S$250 PER TRANSACTION LIMIT
Chocolate Finance has also temporarily implemented a S$250 per transaction spending limit on its debit card "to help us manage the liquidity programme", it said in its email.
Card transactions were initially paused on Monday.
"We’ve also made slight adjustments to where you can use your card - specifically, transactions made on AXS and e-wallet top-ups are no longer supported," the platform said, adding that this would help keep its HeyMax miles earning programme running.
FUNDS "SECURE AND RINGFENCED"
All customer investment funds are securely held by Chocolate Finance in "segregated, ringfenced accounts" with both the company and Allfunds - a fund distribution platform.
As a licensed custodian, Allfunds provides fund dealing and custody services to Chocolate Finance and ensures that customers’ investments are securely custodised and safeguarded within Singapore’s regulatory framework, the platforms said in a joint release on Wednesday.
"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," Allfunds Singapore CEO David Perez de Albeniz said.
Allfund's "robust custodian framework" ensures that all investments remain protected and accessible to Chocolate Finance following standard redemption processes, he added.
Both platforms reiterated that the withdrawals are processed "as expected and in line with industry-standard settlement periods".
“While we have seen a spike in withdrawals, all are being processed in an orderly manner. We assure customers that their funds are secure, and withdrawals are proceeding as scheduled,” Mr de Oude said on Wednesday.
What is Chocolate Finance?
Chocolate Finance was founded last year by Mr de Oude. It is a brand under Chocfin, a capital market services licence holder regulated by the Monetary Authority of Singapore.
According to its website, funds with Chocolate Finance are held separately by custodians, including HSBC, and are not covered by the Singapore Deposit Insurance Corporation as it is not a bank.
When it launched, its higher-than-average cash returns - 3.3 per cent per annum on the first S$20,000 deposited,3 per cent per annum on the next S$30,000 and a target of 3 per cent per annum above that - created some buzz among investors.
"We take no fee and make no money until we deliver the target returns," Chocolate Finance said.
It also promised to offer even better cash returns for those parking US dollars - a future offering promised 4.6 per cent per annum on the first US$20,000 depositedand4.2 per cent for the next US$30,000.
These targets are, however, subject to change based on market conditions, according to Chocolate Finance.
"GAMING" MILES REWARD SYSTEM
In an exclusive interview with 鶹ý on Monday,Mr de Oude said after the company discovered that customers were gaming its miles reward system by making big payments on AXS machines, Chocolate Finance decided to "nip it in the bud".
This led to"a lot of unhappiness that such a lucrative benefit was suddenly cut short", said Mr de Oude.
The change wasn't properly communicated to customers, who grew uneasy and started withdrawing their funds – hence depleting the pool of liquidity that Chocolate Finance maintains for instant withdrawals.
Chocolate Finance is operated by Chocfin, which is licensed and regulated by the Monetary Authority of Singapore (MAS) to perform fund management activities.
In response to 鶹ý's queries, MAS said on Monday it has instructed Chocfin to ensure it returns funds to customers in an orderly manner and to keep customers informed of developments. "MAS is separately querying Chocfin about its representations of its instant withdrawals (programme)," a spokesperson said.
On Wednesday, MAS issued a statement to say it notes Chocolate Finance and Allfunds' joint statement on the security of Chocfin’s fund holdings and orderly processing of withdrawals.
"Customer monies must remain intact and cannot be used to meet the liabilities of the digital advisor at all times.
"MAS notes the confirmation provided by both Chocolate Finance and Allfunds that these requirements have been fully met," said the authority.
It added that digital advisors are required to segregate customer assets from their own, with customers’ assets and monies needed to be held in independent custody by custodians licensed and regulated by MAS.
"MAS continues to engage Chocolate Finance to ensure that all customer withdrawals will be met in an orderly fashion," it said.
