Tokenize Xchange operator under probe, director charged with fraudulent trading

CNA

6 days ago

SINGAPORE: The operator of cryptocurrency trading platform Tokenize Xchange is under investigation, the Singapore Police Force (SPF) and the Monetary Authority of Singapore (MAS) said on Friday (Aug 1).
AmazingTech and its related companies are currently being probed by the Commercial Affairs Department (CAD) for potential offences, including fraudulent trading, SPF and MAS said in a joint statement.
Mr Hong Qi Yu, a director of AmazingTech, was also charged on Thursday with fraudulent trading. The offence carries an imprisonment term of up to seven years, a fine, or both.
AmazingTech had operated Tokenize Xchange under an exemption from holding a licence under the Payment Services Act 2019 while MAS assessed its application.
Authorities said the exemption applied to entities already conducting activities that came under the Act when it took effect.
The joint statement said AmazingTech is not licensed by MAS and its activities were not supervised or regulated by MAS.
Its exemption ended on Jul 4 when MAS rejected its application for a digital payment token license.
'Thereafter, AmazingTech was required to cease providing payment services, wind down its business in an orderly manner, and ensure that all monies and digital payment tokens received from its customers were returned,' said MAS and SPF.
Tokenize Xchange said on Jul 20 it would relocate to Labuan, Malaysia, after MAS rejected its application.
CUSTOMER COMPLAINTS
In mid-July, MAS received several customer complaints against the company for delays in processing withdrawals of funds and digital payment tokens to customers.
'MAS asked AmazingTech to remedy these concerns and take steps to return the monies and digital payment tokens to customers in an orderly manner, including topping up the shortfall in the customer accounts.'
From its engagements with the company, MAS subsequently found indications that it did not have sufficient assets to meet its customers' claims and that it might not have segregated its customers' assets from AmazingTech's assets.
MAS also found indications that AmazingTech might have made false representations to MAS regarding the segregation of its customers' assets, when it applied for a major payments Institution licence.
MAS then referred the company to CAD for investigations.
Tokenize previously said that its 15 employees in Singapore would be laid off by Sep 30, though some may be offered work in its international operations.
Staff who remain will assist Singapore users until then, and the company said it would support employees in their search for new career opportunities.