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- 🤯 Tokenize Xchange: S$266M Missing After MAS Rejection
🤯 Tokenize Xchange: S$266M Missing After MAS Rejection
How a fast-growing crypto exchange was left with less than 1% of customer funds
Admond Lee
February 08, 2026
P.S. One brand ran a single The Runway Ventures campaign and generated 250+ founder clicks that turned into inbound leads.
Hey Founders,
Welcome to The Runway Ventures — a weekly newsletter where I deep dive into failed startup stories to help you become the top 1% founder by learning from their mistakes with actionable insights.
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Osome is hosting a FREE 30-minute webinar on 10 Feb 2026 showing how founders get real cash-flow clarity — without spreadsheets, jargon, or accounting overwhelm.
It’s capped at 50 founders.
🤫 Today’s story is about a fast-growing crypto exchange that faked liquidity, commingled customer funds, and collapsed with S$263 million missing — all under Singapore’s regulatory spotlight. Let’s get to it! 🚀
Today at a Glance:
☠️ 1 Failed Startup → Tokenize Xchange
⚠️ 2 Mistakes → Commingling customer funds with company operating capital
🧠 3 Lessons Learned → Simulating traction with fake liquidity will eventually break trust (and the business)
🔗 The Runway Insights → Closing your first $1M ARR with founder-led sales
💰 Southeast Asia Funding Radar → Green Rebel raises $12.5M to develop plant-based meat tailored to Asian tastes
☠️ 1 Failed Startup: Tokenize Xchange
🚀 The Rise of Tokenize Xchange
🇸🇬 Founded by Hong Qi Yu (QY) in late 2017, Tokenize Xchange was built to create a safe, user-friendly crypto exchange for the masses.
🕺🏻 Founders’ Story
In 2017, Hong Qi Yu was a frustrated crypto trader in Singapore who couldn’t find a reliable platform to buy Bitcoin with SGD — delays, clunky UIs, and no proper order books made it nearly impossible.
Fresh out of NTU and working at robo-advisor Bambu, he realised the infrastructure gap was killing crypto adoption in Southeast Asia.
💰 So, with S$100k from a friend and a small team, he started building Tokenize Xchange — a simple, compliant, fiat-friendly crypto platform.
By 2018, the beta launched, and by mid-2018, they’d raised $12M from an ICO to take things regional.
The Problem — 🤦🏻♂️ Retail and institutional investors often faced delays, lack of trust, and no local platform that felt safe or easy to use.
This is because in 2017, crypto adoption in Southeast Asia was hampered by high barriers to entry.
There were few fiat on-ramps, clunky trading platforms, no SGD order books, slow KYC processes, and unclear regulatory support.
The Solution — 🪙 Tokenize Xchange built a centralised, compliant, all-in-one crypto exchange tailored to Southeast Asia. It offered:
seamless fiat-to-crypto trading (including SGD pairs)
a simple UX for new investors
an in-house wallet
staking via “Crypto Earn”
its own utility token (TKX) for fee discounts and rewards
… all under a regulatory-first approach that gained it licensed status in Malaysia.
🌏 In short, Tokenize Xchange (TX) set out to be the Coinbase of Southeast Asia, giving everyday investors a frictionless way to access digital assets while addressing the pain points QY experienced.
 | 🚀 By January 2018, they launched a beta version of the exchange to a modest 100 early users, offering just Bitcoin and Ether trading at the start. While the momentum was great, TX nearly ran out of cash (1 month of runway left) and even had to warn staff that payroll might be late. 🤯 Luckily, the team introduced their own native token (TKX) and held an initial coin offering — raising a whopping $12 million in Ether by mid-2018 — and that saved the company. The turning point? 🤝🏻 TX got a full regulatory license from Malaysia’s Securities Commission in April 2020. From there, TX rode the wave to new heights. |
🚀🇸🇬 By the end of 2021, Tokenize Xchange’s own loyalty token, TKX, hit a market cap of around $1 billion, making it only the second Singapore-linked crypto token to reach that milestone.
Not just that, it had over 50 different cryptocurrencies available for trade, including hot newcomers like Solana and Polkadot
🏔️ At its peak, TX was unstoppable:
Raised $23 million in Series A funding
Had over 300,000 verified users globally
Launched Titan Chain and a $100 million developer grant
Kenanga Investment Bank held a 19% stake in Tokenize Malaysia
Partnered with Animoca Brands as the largest validator for Titan Chain
Operated in Singapore, Malaysia, Vietnam, Thailand, and Indonesia
S$266.3 million in customer assets (fiat + crypto) under custody before collapse
🔥 By all appearances, Tokenize Xchange was on track to become a leading homegrown crypto exchange — the future looked bright.
📉 The Fall of Tokenize Xchange
But not for long.
Because beneath the surface, a storm was brewing.
Behind the shiny press releases and investor decks, customer funds were allegedly being mishandled, regulators were circling, and the truth was dangerously close to unraveling.
❌ Then came the blow → MAS denied their license.
Within days, withdrawals were frozen, the founder was charged with fraud, and over S$260 million in user funds simply vanished. What looked like a rising crypto empire collapsed almost overnight.
📌 Here’s what happened to Tokenize Xchange:
🚀 To the mooooooooooooon bruh
2017 — Tokenize Xchange (TX) was founded in Singapore by Hong Qi Yu, who assembled a team to build a better crypto trading platform for the mass market.
Jan 2018 — Launched its beta exchange with Bitcoin and Ether trading for the first 100 users.
Mid 2018 — 🪙 Introduced its own token (TKX) and conducted an initial coin offering, raising ~US$12 million in Ether.
2019 — 🥶 The crypto winter hit hard.
Bitcoin’s crash forced TX to downsize after revenues plunged ~90% from the previous year.
Despite the turmoil, the platform’s user base grew 10x to over 100,000 users by mid-2019.
Apr 2020 — 🇲🇾🤝🏻 Secured a full Digital Asset Exchange license in Malaysia, one of the first three exchanges to do so under new regulations. The company could now legally serve Malaysian users and was Malaysia’s second-largest exchange by trading volume.
Dec 2021 — 🤑 TKX peaked at ~US$48 (market cap around $1B) amid the hype.
Aug 2022 — 💰 Raised $11.5 million in a Series A (Phase 1) funding led by TRIVE Ventures. This marked the company’s first major venture round, boosting resources for product development and compliance.
Mar 2024 — 💰 Secured another $11.5 million in Series A (Phase 2), bringing total Series A funding to $23M.
Founder QY announced plans to 5x the Singapore team (from 20 to 100 employees) with a focus on regulatory compliance.
The company was optimistic about finally obtaining a MAS license and even launched its own blockchain (“Titan Chain”) to expand its ecosystem.
🤬 Give me back my money
4 Jul 2025 — 🏦🙅🏻♂️ The Monetary Authority of Singapore (MAS) rejected Tokenize Xchange’s license application (officially deciding not to grant the Major Payment Institution license).
TX had been operating under an exemption pending this decision, but now that grace period was ending.
17 Jul 2025 — 👋🏻 TX notified its users via email that it would be winding down all Singapore operations, effective immediately.
A phased withdrawal schedule was announced (based on account size) with final deadlines by end-September 2025. Users were urged to withdraw their assets to other platforms.
20 Jul 2025 — 😤 News of Tokenize’s shutdown went public.
The company confirmed it’d cease Singapore operations after failing to obtain the license, and said it planned to relocate to Labuan, Malaysia to continue serving international customers under a new regulatory framework. At this point, trading for Singapore users has already been halted.
31 Jul 2025 — 🚨 In a dramatic turn, founder & CEO Hong Qi Yu was arrested and charged with fraudulent trading amid an ongoing investigation.
Authorities alleged that TX provided false information about how it was handling customer funds (specifically, misrepresenting that assets were segregated).
This charge carries up to 7 years jail if proven.
1 Aug 2025 — 🚨🚨 Singapore’s police and MAS issued a joint statement revealing they were investigating TX’s parent company (AmazingTech Pte Ltd) for potential offences including fraud.
MAS noted it had found indications of insufficient assets and commingling of funds, triggering the referral to law enforcement.
15 Aug 2025 — 👨🏻⚖️ At the request of a group of creditors, the High Court placed AmazingTech under interim judicial management.
KordaMentha was appointed to take control of the company and attempted to stabilise the situation.
All remaining withdrawals were suspended as the judicial managers assess Tokenize’s financial position.
9 Sep 2025 — 💸 The court-appointed managers reported that TX owed approximately S$266.3 million to over 2,200 customers, based on claims filed as of mid-August.
It was a massive shortfall, as the company’s available assets were only $2.6 million (a tiny fraction of what’s owed). Customers’ funds were now in limbo, with no quick resolution in sight.
Dec 2025 — ⚠️ In a bid to recover their losses, 272 former TX users filed a collective lawsuit against Hong Qi Yu (and a related party, reportedly his spouse) for over S$60.5 million in damages.
The lawsuit claimed that TX misappropriated customers’ assets and breached its duties.
By this time, TX is effectively defunct — a shell under investigation, its website inactive, and its founder fighting multiple legal battles.
And just like that, it all fell apart.
Tokenize Xchange looked like a legit, fast-growing exchange — licensed in Malaysia, backed by big investors, building its own blockchain.
🤦🏻♂️ But behind the scenes, they didn’t even have 1% of the assets they owed users. MAS pulled the plug, withdrawals froze, and thousands of people were left with nothing.
What started as Singapore’s most promising crypto platform ended up as one of its biggest failures.
Want to learn more about Tokenize Xchange’s downfall?
⚠️ 2 Mistakes
Mistake 1: Relying on temporary regulatory exemptions as a long-term operating model
Tokenize scaled aggressively in Singapore while only holding a temporary license exemption, assuming a full MAS license would eventually follow.
🏃🏻♂️ So, they onboarded hundreds of thousands of users, managed over S$260M in customer assets, raised funds, and expanded headcount — all without securing legal certainty to operate in their home market.
🔥 While the exemptions were common in Singapore, but that also led to overexposure:
No contingency plans
No throttling of growth
No fallback if approval didn’t come
And when MAS rejected the license in July 2025, operations were forced to shut down instantly, triggering user panic and withdrawal pressure.
Mistake 2: Commingling customer funds with company operating capital
💸💸💸 Judicial managers later revealed Tokenize had commingled customer deposits with corporate funds, leaving just S$2.6M to cover over S$266M in obligations (<1% of available assets).
MAS accused the company of misrepresenting its custody practices in license applications.
Internally, this meant funds meant for user withdrawals were reportedly used for expenses like marketing, staffing, or platform development.
🧠 3 Lessons Learned
Lesson 1: Treat regulatory grace periods like countdowns (not green lights)
Tokenize ran full-speed under a temporary exemption from MAS while waiting for a full license. They raised funds, onboarded users, scaled ops — but never paused to ask:
What if the license doesn’t come through?
When it was rejected in July 2025, they had no fallback, and the entire Singapore operation imploded within days.
🌮 Key Takeaways:
A regulatory exemption is not permission — it’s a warning clock.
If licensing is core to your business model, act like you haven’t been approved until you hold the actual license.
Building on borrowed legitimacy compounds fragility.
🛠️ Operator Playbook:
📊 Add a “Regulatory Risk Tracker” to your OKRs
Track: license status, compliance roadmap, key authority contacts, deadline buffers.
Assign a dedicated owner, not shared across ops/legal.
🧭 Review how your business would operate if the regulator publicly denied you today
Ask: Would your core value prop still survive? Would users still trust you?
Study how Coinhako (another Singapore crypto exchange) built trust by emphasising licensing first, growth second. They were one of the few to get approved.
Lesson 2: Don’t break user trust
Tokenize used customer deposits to fund operations, marketing, and expansion — assuming future growth or fundraising would cover the gap. But when MAS pulled the plug, they had less than 1% of what users had entrusted to them.
It wasn’t just a liquidity problem — it was a trust collapse. In financial products, once trust is broken, there’s no “bounce back.”
🌮 Key Takeaways:
When users give you their money, they’re trusting you to protect it — not to spend it.
Misusing customer funds might not break the product immediately, but it quietly erodes the business’s foundation.
In trust-first categories (like fintech, crypto, healthcare, education), credibility is the product.
🛠️ Operator Playbook:
🔒 Keep customer funds sacred
Segregate them from ops accounts and use a third-party custodian or audited wallet structure (tools: Fireblocks, Anchorage Digital).
📊 Set up real-time visibility on user fund flows vs burn
Treat trust like a financial liability, not an intangible.
🧾 Build public transparency habits early
Share monthly wallet snapshots, proof-of-reserves, even basic FAQs on where user funds are held.
Finally… if your business model requires float or liquidity leverage (like wallets, exchanges, lending), design controls and user disclosures up front — or you’ll pay for it later in legal, reputational, and existential costs.
Lesson 3: Simulating traction with fake liquidity will eventually break trust (and the business)
Tokenize didn’t build a real order book. Instead, it mirrored Binance’s prices and spreads to make it look like it had deep liquidity.
Under the hood, customers were trading directly with Tokenize — not with other users.
This “synthetic liquidity” created short-term confidence but long-term fragility.
🌮 Key Takeaways:
Liquidity is not just a product feature, it’s a liability if it’s not real.
Perceived scale without actual scale creates a false sense of security.
The difference between platform and counterparty matters — especially when markets move fast.
🛠️ Operator Playbook:
🔍 Show real order book transparency (even if thin)
🧠 Benchmark execution quality against real exchanges
Test spreads, slippage, and fill times vs Binance/Coinbase.
Run regular mystery shopper audits on your platform.
🧩 Match your business model to your market-making capability
If you can’t afford internal market makers, start with peer-to-peer, batch matching, or DEX aggregation (like 0x).
Build real liquidity primitives — don’t simulate them.
🔗 The Runway Insights
💰 Southeast Asia Funding Radar
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That’s all for today
Thanks for reading. I hope you enjoyed today's issue. More than that, I hope you’ve learned some actionable tips to build and grow your business.
You can always write to me by simply replying to this newsletter and we can chat.
See you again next week.
- Admond
Disclaimer: The Runway Ventures content is for informational purposes only. Unless otherwise stated, any opinions expressed above belong solely to the author.
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