The Monetary Authority of Singapore (MAS) and the Commercial Affairs Department (CAD) of the Singapore Police Force have launched a joint investigation into various companies under the CoAssets Group for possible offences under the Penal Code and the Securities and Futures Act (SFA).
The joint investigation stems from complaints and feedback received from members of the public regarding suspected misconduct by CoAssets, a Singapore-based crowdfunding platform.
Tech in Asia first reported in December that CoAssets’ investors were left in the lurch when the company transferred US$30 million of its borrowings to a debt recovery firm Sunfits that is virtually unknown.
MAS said in a statement that of the CoAssets Group Companies, only CA Funding Pte Ltd (CAFPL) is regulated by the monetary authority as a capital markets services licensee.
In March 2020, MAS issued a direction to CAFPL to prohibit the company from listing new issuances, onboarding new investors and accepting subscription of securities.
These directions were issued after MAS’ inspection uncovered lapses in CAFPL’s credit assessment process, inadequate disclosure of information to investors, and failure to address conflicts of interests arising from dealings that the CoAssets had with entities related to issuers that CAFPL had listed on its platform.
MAS also directed CAFPL to appoint an independent external auditor to review the effectiveness of its remedial measures to address these deficiencies.
However, CAFPL informed MAS in December 2020 that it had failed to comply with the minimum base capital requirement under the SFA and intended to cease operations where the firm announced on its company website in early January that it will be shuttering its operations.
All of CAFPL’s customers’ monies have have since been returned to investors following MAS’ directive. The central bank said that it is closely monitoring CAFPL’s implementation of its cessation plan, to ensure that investors are treated fairly.
