Singapore police and central bank launch probe into companies under CoAssets Group

The Singapore Police Force and the Monetary Authority of Singapore (MAS) have launched a joint investigation into various companies under the CoAssets Group after authorities received complaints and feedback regarding suspected misconduct by the group.

Photo credit: Monetary Authority of Singapore

Tech in Asia first reported in December that investors had lost over US$30 million after CoAssets, a Singapore-based investment platform, had disposed the money into Sunfits, a virtually unknown debt recovery firm.

CA Funding Pte. Ltd. (CAFPL), the only company under CoAssets group regulated by MAS as a capital markets services licensee, informed the central bank in December 2020 that it had failed to comply with the minimum base capital requirement under the Securities And Futures Act.

However, most of the money lost was not held by CAFPL but by other CoAssets entities.

To ensure investor safety, MAS asked CAFPL to return all customers’ money to investors, most of which were held in other CoAssets entities. The agency also said it is closely monitoring CAFPL’s implementation of its cessation plan.

Earlier in March 2020, MAS prohibited CAFPL from listing new issuances, onboarding new investors, and accepting securities subscriptions. This direction came on the back of lapses in the firm’s credit assessment process and inadequate disclosure of information to investors.

The company also came under fire after MAS’ inspection stated that CAFPL did not address conflicts of interests arising from the dealings that the companies under CoAssets Group had with entities related to issuers that CAFPL listed on its platform.

In order to review the effectiveness of its remedial measures, CAFPL was also asked to appoint an independent external auditor.

Launched in 2013, CoAssets was a crowdfunding site for real estate projects. It was part of a wave of peer-to-peer lending platforms, including MoolahSense and Funding Societies, that emerged in Singapore around that time.