Singapore’s Minister of State for Trade and Industry and Culture, Community and Youth Alvin Tan has called for stronger investor safeguards and clearer product disclosures following the recent Chocolate Finance incident.
The fintech saw users tapping its rewards programme in ways that proved unsustainable.
In response, the company made changes to its features with limited communication, resulting in user frustration and a sharp increase in withdrawal requests.
On 10 March, Chocolate Finance suspended its instant withdrawal feature and paused debit card spending tied to investment value.
Withdrawals were instead processed within three to ten working days.
The company reportedly handled over S$500 million in withdrawals in one week.
Although these limitations were stated in the platform’s terms and conditions, Tan noted that customers might not have fully grasped the implications or associated risks.
Despite the disruption, Tan, who is also a board member of the Monetary Authority of Singapore (MAS), said regulatory safeguards functioned as intended.
Customer assets—legally separated and held by licensed custodians—remained protected, and standard withdrawals were processed at market value within a few days.
Chocolate Finance operates under Singapore’s Capital Markets Services licensing regime, which covers digital advisers and portfolio managers.
While product features like instant withdrawals don’t require regulatory approval, MAS mandates proper risk management and transparent disclosures.
MAS is reviewing the case to assess how such platforms can better meet these requirements.
Tan also reminded retail investors to understand the products they invest in and to seek professional advice when needed.
