A financial services company established by the founder of Singlife has been appearing in headlines after suspending instant withdrawals.
Earlier this week, Chocolate Finance began to emerge in headlines after its suspended of instant withdrawals. According to the Singapore-based robo advisor, the move was made due to «unusually high withdrawal requests» and that customers' funds are «always safe».
«While fund managers do not typically offer instant liquidity for withdrawals, Chocolate’s provides instant withdrawals through its unique liquidity program, which makes it possible to receive proceeds earlier than usual,» the company said in a press statement.
«Due to the recent temporary surge in withdrawals, we have paused this program and reverted to the standard fund redemption process, which takes 3–10 business days to settle. This pause is not a liquidity issue but a matter of managing our increased transaction volume.»
Who is Walter de Oude?
Chocolate Finance was established in July 2024 by Walter de Oude who is the founder of Singlife.
Born in South Africa and having lived in Singapore since 2000, de Oude is an insurance veteran who was previously the deputy chairman of Aviva Singapore and CEO of HSBC Insurance Singapore. He also worked at Willis Tower Watson as a consulting actuary for two years.
Since 2023, he has stepped down from all executive and non-executive appointments at Singlife and no longer retains any interest in the insurer.
What About the Business?
Chocolate Finance is an asset management business and a brand of Chocfin, a capital market services license holder regulated by the Monetary Authority of Singapore (MAS).
Its offering is based on delivering competitive yields, currently 3.3 percent for the first S$20,000 ($15,000). As of February this year, it had over 60,000 customers and nearly S$1 billion in assets under management.
Chocolate’s financial backers include Peak XV (previously known as Sequoia), global tech investor Prosus and partners of DST Global.
Why Did Withdrawals Surge?
In an interview with Singapore media outlet «CNA», de Oude explained that withdrawals increased after customers responded negatively to Chocolate’s decision to change its miles reward system. In addition to its asset management business, Chocolate introduced a program in February that offered two miles per Singapore dollar spent through its debit card, which could be transferred to 27 airline and hotel partners.
The program covered spending on ordinary goods and services including through AXS, a Singaporean bills payment platform. De Oude said that there was excessive utilization or «gaming» of the program via the platform which led Chocolate to disable AXS usage and that subsequently led to customer dissatisfaction as well as withdrawals.
«Where we made a mistake, I think, was that we didn’t communicate it as well as we should have with our customers,» he said in a video interview. «There was a lot of unhappiness, I guess, that such a lucrative benefit was suddenly cut short […] but we had to do that to make the program sustainable and to keep the benefits available longer term for everybody.»
Redemption Orders Being Processed
In a separate announcement by Chocolate and Allfunds, its fund dealing and custody service provider, the two firms reiterated that customer investments were securely custodized and safeguarded within Singapore’s regulatory framework. The statement also underlined that redemption orders are being processed and that customers can expect to receive their monies within 3-6 business days of their requested withdrawal.
«MAS notes the confirmation provided by both Chocolate Finance and Allfunds that these requirements have been fully met,» said the Singapore regulator in a separate statement. «MAS continues to engage Chocolate Finance to ensure that all customer withdrawals will be met in an orderly fashion.»
