CAD probing Tokenize Xchange operator; firm’s director charged with fraudulent trading

SINGAPORE - The Singapore police are investigating the company operating cryptocurrency trading platform Tokenize Xchange, and the firm’s director has been charged in court with fraudulent trading.

In a joint statement on Aug 1, the Monetary Authority of Singapore (MAS) and the Singapore Police Force’s Commercial Affairs Department (CAD) said Amazing Tech – the operator of cryptocurrency platform Tokenize Xchange – along with its related entities, is under investigation for potential offences, including fraudulent trading under the Insolvency, Restructuring and Dissolution Act 2018.

The authorities also said that Hong Qi Yu, a director of Amazing Tech and the founder and chief executive of Tokenize Xchange, was charged in court on July 31 with fraudulent trading under the same Act.

The offence carries a maximum penalty of seven years’ imprisonment, a fine, or both.

Tokenize Xchange said on July 20 that it will shut down the business following an MAS decision not to grant it a licence to offer digital payment token services here. It was previously operating under an exemption. 

The firm told The Straits Times then that its customers in Singapore can no longer buy or sell cryptocurrencies on its platform and may only transfer their cryptocurrency holdings to other exchanges, where they can convert them to cash and make withdrawals.

It said that users can continue to withdraw cash directly from the exchange based on the Singapore dollar value of each user’s portfolio, which includes both fiat and cryptocurrency holdings. 

MAS said it received several customer complaints in mid-July about Amazing Tech over delays in processing withdrawals of monies and digital payment tokens.

The central bank said it asked the company to address these concerns and to return customers’ monies and tokens in an “orderly manner”, including by topping up any shortfalls in customer accounts.

Through its subsequent engagements with the firm, MAS said it found indications that Amazing Tech did not have sufficient assets to meet customer claims, and may not have segregated customer assets from its own.

It also found signs that the company may have made false representations to MAS about the segregation of customer assets when applying for a Major Payment Institution Licence. MAS then referred the matter to the CAD for investigation.

MAS added that Amazing Tech and its activities are not supervised or regulated by the authority.

Police said investigations are ongoing. ST has contacted Amazing Tech for comments.