Chocolate Finance users' assets 'properly segregated', safeguards worked as intended: Alvin Tan

Investment platforms are regulated and required in Singapore to keep customer assets legally "separate and safe", typically through licensed custodians.

Such platforms, typically operating as digital advisers that manage investment portfolios on behalf of customers, are licensed as Capital Markets Services (CMS) Licence, under the Securities and Futures Act.

The recent incident of an investment platform facing a surge in withdrawals and subsequently suspending its instant withdrawals illustrated that these "safeguards worked as intended", said Minister of State for Trade and Industry Alvin Tan.

He was speaking during a Parliament sitting on Apr. 8 in response to questions on the risks of financial technology platforms.

Regulatory requirements are in place

In March 2025, Chocolate Finance, a Singapore-based fintech firm, suspended instant withdrawal service following "high demand".

Alluding to the incident, Tan said that the investment platform offered two unique features: instant withdrawal for customers up to a limit per account and the ability for customers to spend on a debit card that was linked to the value of their underlying investments.

The platform stopped both these features when the high usage of both these features became unsustainable for it to support.

While product features do not always require regulatory approval, Tan said there are regulatory requirements in place for "robust risk management and clear disclosures, especially when they impact a firm's operations".

Safeguards worked

In this case, the "safeguards worked as intended", Tan said, explaining that customers' assets were "properly segregated" from the platform.

Additionally, requests for withdrawals were "redeemed in an orderly manner" within the standard fund redemption timeframe of three to six working days, Tan explained.

Customers also received the market value of their investments within the typical three to six days.

The Monetary Authority of Singapore (MAS) is reviewing the case against the regulatory requirements and looking at how to ensure investment platforms implement these requirements effectively, Tan stated.

"At the same time, we urge customers to fully understand the features, including key terms and conditions and risks of a financial product before deciding to invest in it."

Customers can also seek professional financial advice on the suitability of a product or refer to the Money Sense website to learn more.

In response to a supplementary question by Nominated Member of Parliament (MP) Mark Lee on improving financial literacy, Tan said that MAS intends to work with various platforms to promote the understanding of financial products.

More importantly, however, the authority plans to review the case and work with the industry to make platforms' disclosures "clearer and upfront".

Top photos from MDDI/YouTube and Canva