Chocolate Finance Bank Run?! Should I withdraw now?
- MilesWise
- Mar 10
- 3 min read
What a great start to Monday morning…
On Sunday, personal finance YouTuber Sethisfy dropped a video titled: "I’m withdrawing everything from Chocolate Finance — here’s why." (Watch here)
The video is well-rounded and lays out two key reasons for his withdrawal:
The 3.3% interest rate isn’t as attractive anymore, given that banks are offering up to 4.x% if you’re willing to jump through some hoops.
The AXS drama has soured trust in Chocolate Finance (CF), making him uncomfortable with leaving money there.
Sethisfy did end by saying that he hope he will not be causing a bank run. A bank run typically happens when banks loan out money and don’t maintain 100% liquidity. CF, on the other hand, invests user funds in money market funds (MMFs) or short term bond funds, meaning withdrawals are processed based on fund redemption timelines.
Panic Mode Activated
Despite Sethisfy's clarification, the headline of the video was enough to trigger mass panic. The comments section and CF's Telegram chat exploded, with people rushing to withdraw their funds in fear of a "bank run."
What didn’t help:
Instant withdrawals was based on a liquidity pool, which probably has a cap.
It was a Sunday, meaning no one was actively monitoring the situation.
CF quickly paused instant withdrawals and announced a 3-6 business day processing time instead.
To be fair, this is a normal timeline for robo-advisors like Endowus, StashAway, and Syfe when withdrawing from cash management funds. Milelion then posted a workaround—using the GrabPay Card to withdraw funds instantly. This, of course, added even more panic to the situation. and created even more panic when the workaround didnt work for some.
Investor Statement: A Reality Check
Someone from Saison Capital, an early CF investor, then issued a statement reassuring users:
Walter de Oude (CF’s founder) also founded Singlife and has a strong track record.
CF’s funds are in MMFs, and MMFs always require 2-3 days for deposit/withdrawal processing.
CF maintains a liquidity pool for instant withdrawals, but this pool is not infinite. When it's depleted, withdrawals must go through the standard MMF process.
MilesWise Verdict
For me, nothing fundamentally changed. It was always clear that CF isn’t a bank (i.e., not SDIC-insured) and carries the same risks as other MMF-based products like Endowus, StashAway, or Syfe.
If withdrawing your $20K makes you sleep better at night, go ahead. The 0.5% extra interest (~$8.33/month) isn’t worth losing sleep over.
If the AXS drama has eroded your trust in CF, feel free to exit. CF definitely needs to improve its PR and communication, especially around product changes. My guess? They underestimated the volume of AXS transactions and bled too much in fees, forcing them to rethink the CF Visa card’s positioning.
If you’re withdrawing because you fear a "bank run," pause and think rationally. The product itself hasn’t changed, and the liquidity pool explanation makes sense.
As for me? I’m just sitting back and watching the drama unfold. I knew what I signed up for, and nothing materially changed. If anything, CF might start offering higher rates or guaranteed rates to regain trust and hit their acquisition targets.
This is an evolving story—stay tuned for updates.
Withdrawing CF funds now?
Yay, "BANK RUN!?!"
Nay, *Popcorn crunches*
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