Tokenize Founder Hong Qi Yu Faces S$60.5M Crypto Misappropriation Lawsuit

A Singapore court just got a new case file—and it's a whopper. Tokenize founder Hong Qi Yu is staring down a lawsuit alleging he misappropriated a cool S$60.5 million in crypto assets. That's not a typo.

The Accusation

The claim is straightforward: funds that weren't his to move allegedly went walking. We're talking about a sum that would make even a seasoned whale blink, pulled from the digital vaults of the Tokenize ecosystem. It's the kind of headline that sends shivers through retail investors and gives regulators another reason to sharpen their pencils.

The Ripple Effect

This isn't just about one founder. It's a stress test for an exchange's internal controls and a stark reminder of the 'trust' part in 'trustless' technology. When leadership faces allegations of this magnitude, confidence doesn't just dip—it can plummet. Expect a lot of nervous portfolio checking in the coming days.

A Defining Moment

The case cuts to the core of crypto's perennial growing pains: legitimacy versus the wild west. A S$60.5 million suit is more than a legal dispute; it's a public spectacle that will be dissected by critics and proponents alike. The outcome could either become a textbook example of system failure or a benchmark for accountability.

For an industry constantly battling the ghost of Mt. Gox, this is the last thing it needs. Yet, here we are—another multi-million dollar lesson in why your keys are supposed to mean your coins. Funny how the old-school problems of fiduciary duty just won't stay in their traditional finance lane.

Main allegations of the lawsuit

The suit alleges that Hong and Koo improperly transferred customer funds that should have been kept in segregated accounts. A report in September by court-appointed interim judicial managers showed AmazingTech owed its users about S$266 million but had only a portion of that in realizable assets.

The respective damages of the claimants stand at S$60.5 million, calculated per the balance each held on the exchange before trying to withdraw or as of July 31, 2025.

Additional allegations state that Tokenize Xchange operated under inadequate standards and lacked transparency. As per the lawsuit, the site did not provide trading via a regular central limit order book but instead allegedly carried out the transactions directly between itself and its users.

The order book shown to the customers was reportedly from the Binance crypto exchange and included an undisclosed mark-up on the spread, giving the appearance of high trading volume.

The class-action lawsuit also alleges a breach of contractual representations, including that the firm commingled company funds with user funds instead of holding them in a trust.

Lead lawyer Suresh Divyanathan, managing director of Dauntless Law Chambers, said his clients were devastated by the discovery. “The interim judicial managers’ report that AmazingTech appears to be holding less than 1 per cent of customers’ total assets came as a DEEP shock to my clients,” he said. “They are incensed that practically all their assets on Tokenize Xchange have disappeared. Some of them have lost their entire life savings.”

Regulatory timeline and criminal charges

AmazingTech, which operates Tokenize Xchange, was set up in Singapore in 2016. The exchange had earlier operated under an exemption from the Payment Services Act 2019 while its application for a Major Payment Institution license was being processed by the Monetary Authority of Singapore.

This period of regulatory uncertainty concluded in July 2025, when the Monetary Authority of Singapore (MAS) rejected AmazingTech’s license application. The company was mandated to stop offering payment services and reimburse all clients’ money and cryptocurrency.  

In August 2025, the Commercial Affairs Department (CAD) started an investigation into AmazingTech and entities associated with the firm. Authorities reported that there were problems with not having enough money to pay user claims and potential issues with customer money separation.

Due to Hong’s separate charges for fraudulent trading under the Insolvency, Restructuring and Dissolution Act in July 2025, the regulatory collapse was accompanied by criminal charges.  The High Court ultimately wound up the business in September 2025. 

The lawsuit also mentioned the company’s past claims of obtaining a license in Labuan and being at the “final phase” of securing a license in the Abu Dhabi global market. The judicial manager’s report stated that neither license was passed due to the fraud allegations against Hong.

Legal proceedings

The trial is expected to be lengthy. Hong Qi Yu is represented by lawyers Nichol Yeo and Clement Julien Tan of Nine Yards Chambers, while Erin Koo Kee Hoon has her own set of lawyers. 

The result of this lawsuit will define the degree to which founding executives will be held personally liable for financial losses that users suffer from alleged mismanagement and fraud. For the wider crypto industry, the case underlines the requirement for regulatory oversight and the strict segregation of customer and company funds if retail investor confidence is to be rebuilt after a spate of high-profile exchange collapses.

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