- Fintech firm Six Capital has responded to complaints from users who say they can't cash out from the firm's web-based strategy game
- SixCap founder Patrick Teng called the incident a "hiccup" and said the firm is working to resolve the issue
- Tagg Switch, the game, works similarly to how trading works in the foreign exchange market
The game, called Tagg Switch, works similarly to how trading currencies works: Players purchase one of six types of so-called "Nodes" that represent a different currency — either the U.S. dollar, Singapore dollar, British pound, euro, yen or the Australian dollar.
Over time, those Nodes and their relative values change, and players create a strategy to switch over to Nodes that they think will appreciate in value. As a result, they can end up making profits.
But a report from Singapore's The Straits Times last week said users have complained online about facing problems cashing out of the game. However, the report added that there weren't yet any complaints registered with the Consumers Association of Singapore, a consumer protection group.
In an email to clients that was reviewed by CNBC, SixCap founder Patrick Teng said his team was working hard to "overcome the recent hiccups," and to restore yields and honor withdrawals.
Teng explained in the email that the situation resulted from SixCap's bank ceasing to provide banking services to the company.
He said: "Despite our business model being open (and the subject of various clarification exchanges between ourselves and the Singapore regulatory authority) and our belief that it is conducted in compliance with all relevant laws, our bank (we suspect because of news of bad-apple businesses which promise guaranteed returns without any underlying sustainable business model in support of such guarantee) had taken the commercial decision to cease provision of banking services to us."
Teng added that the bank's decision "necessarily resulted in disruption of payments to our customers and in turn led to a wholly unexpected (and in context unreasonable) surge (more than 20 times what is business as usual) in requests for redemption of customers' original purchases."
"Six Capital Investments Ltd (BVI) has in numbers over 25,000 customers out of which 1,282 are affected in this episode," Teng said in the email.
The firm, he said, has been reaching out to them individually or in small groups since early September, and that other members of the Six Capital Group will be involved in helping to mitigate the issue.
For the moment, Teng said in the email, business as usual payments "need to be disrupted for such reasonable period as would allow an orderly and equitable satisfaction of all payment requests in a manner not materially damaging to our underlying business."
Asked for further comment by CNBC, the firm responded in a written statement: "SIXCAP Group has since 2009 built 4 core and integrated businesses namely, RICEBOWL Trading, TAGG Switch, AMICO.ai and Thundr.tv.; it is akin to a plane flying on 4 engines. TAGG has a hiccup that needs to be fixed and we aim to do that within the next 6-8 weeks."
In its September 4 report, the Straits Times said Teng had blamed the "hiccups" on strict anti-money laundering and know-your-customer requirements at local Singapore banks.
The report pointed out that Six Capital is on the Monetary Authority of Singapore's (MAS) Investor Alert List. That list names firms that "have been wrongly perceived as being licensed or authorized by MAS." SixCap was added to the list in March last year, the Straits Times said.