Wow, I suddenly noticed a huge surge in readers on my previous post (Why I Am Not Taking Part In the Guaranteed Interest Rate Product Offered by Chocolate Finance?) in July 2024 on Chocolate Finance. In case some folks who are too busy and not sure what is happening, the recent talk of the town over the past 2 days is about a "bank run" on Chocolate Finance which forced it to halt its instant invested cash withdrawal feature. The panic cash withdrawal was primarily triggered off by the videos posted by Kelvin Learn to Invest and Sethisfy where both social influencers informed their followers that they are withdrawing from Chocolate Finance.
1. Quick Thoughts
I thought that both Kelvin and Seth could have been more discrete and low profile in their handling of this epsiode instead of putting out the videos and then bringing up integrity issue among the management team of Chocolate Finance due to the withdrawal of the miles programme using AXS payment. I also believe that both have previously been paid by Chocolate Finance to promote their products last year. Unfortunately, triggering a stampade of mass exodus of funds and investors will not look too good on them- apparently they have underestimated their influence.
In addition, both finfluencers also risk exposure to potential lawsuit by Chocolate Finance and also retail investors who followed them in the event that there are any financial losses arising out of this entire fiasco. While probability of Chocolate Finance going after them is extremely low as it will further damage their business reputation, I do not think that it is worth the trouble to even expose oneself to such needless potential legal lawsuits. Even if one thinks he/she will surely win any law suits, there will be initial non-recoverable legal consultation costs and also invaluable time wasted in such an event.
2. Will Investors Get Back Their Money?
Since the CEO of Chocolate Finance has come out to defuse the entire situation, I believe that retail investors will be able to get back all their money eventually if the panic withdrawal subside. Nevertheless, I am still pessimistic about the product offered by Chocolate Finance as aforesaid mentioned in my previous post.
Parting Thoughts
There is no doubt that there is already a certain degree of branding damage to Chocolate Finance due to it not honouring the instant withdrawal feature that was being marketed. Personally, I will continue to stay far far away from Chocolate Finance. For excess funds, it maybe better to just park them in real banks where the first S$100K is entirely covered by the Singapore Deposit Insurance Corporation ("SDIC") for piece of mind.
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