Table of Contents
U-Zyn Chua, co-founder of Cake DeFi, an online platform offering decentralised finance services and products in Singapore, has initiated the process to wind up the company. The winding-up notice was filed on December 1, as reported in The Straits Times today.
Chua, also the company's chief technology officer, is represented by the law firm Rajah & Tann Singapore in this application. The application will be heard before the High Court on Friday, 22 December 2023.
Cake DeFi's co-founder and CEO, Julian Hosp, previously disclosed in a November 14 blog post that the company would reduce its workforce by 30%. This decision was set to affect 52 employees across their Singapore and Kuala Lumpur offices, decreasing the team size to around 125 members.
Hosp attributed this downsizing to rapid expansion during the buoyant digital assets market of 2020 and 2021, admitting that the company grew operating costs too quickly and underestimated the impact of the broader crypto market slowdown.
While there are signs of the industry's reversal in fortunes, with Bitcoin recently returning to its pre-FTX levels of $43,000, there have been rumors of a growing rift between Cake's two co-founders.
According to a Tech in Asia report, Chua is opposed to the layoffs, and said that Hosp had kept him out of the loop and unilaterally carried out the cuts. He said that the move had “no clear intention” and “would affect the company’s roadmap going forward.”
Response of the Hosp
Hosp has since responded to Chua's wind up application, stating that the company was only informed of his decision yesterday, 6 December.
"While it is regrettable that such internal disagreements have been brought into the public domain, we are working with all stakeholders to resolve this dispute expeditiously," Hosp said in a statement.
The Cake Group CEO claimed that Chua's application was not a result of financial concerns at the firm.
"The Winding Up Application has NOT been brought on the grounds that Cake Group Pte Ltd is unable to pay its debts," Hosp said. "In this respect, our day-to-day operations remain unaffected and we continue to operate at full capacity to deliver our products and services."
A copy of Cake's most recent ACRA filings is attached to Hosp's statement, but the document does not reveal the firm's financial standing this year.
Cake is now disputing the application on the basis of how it commenced and is in the process of engaging legal counsel to contest and dismiss it. Hosp believes the firm has a "strong case" for dismissal.
He again re-emphasised Cake's recent restructuring which has "streamlined operations with new services for customers," adding that “Cake 2.0 introduces positive changes to our product, our service, and our leadership."
Cake's legal counsels are now handling proceedings relating to the buyback negotiations.
"In the meantime, it’s business as usual where customers can look forward to experiencing the new assets and features of Bake 2.0, and the Cake Group’s continued commitment to supporting the DeFiChain ecosystem as a community partner," Hosp concluded.
