Cake Group co-founder files to liquidate firm, court to decide

Cake Group co-founders Julian Hosp (left) and U-Zyn Chua / Photo credit: Cake Group

U-Zyn Chua, co-founder and chief technology officer of crypto firm Cake Group, has applied to the Singapore High Court to wind up the company.

Chua confirmed with Tech in Asia that he had filed the application for liquidation. He is listed as the claimant and Cake Group as the defendant, which, according to the court’s website, means that Chua instigated the proceeding for a compulsory winding up. A judge will then rule whether to grant the application.

A notice of the pending lawsuit was published in the classifieds section of The Straits Times on Thursday.

In Singapore, winding up is the legal process in which a company’s assets are collected and sold to pay off its debts. Anything that is left over is distributed among the company’s shareholders, after which the firm ceases to exist.

Cake Group is the parent company of Bake, a crypto platform that recently announced it was cutting staff. The layoffs were announced on November 14 and amounted to 53 people, or 30% of its employees.

See also: Cake Group lets go staff amid revenue decline, denies cost-cutting

The group, which earns from transaction fees, saw its revenue dwindle by over half to US$266 million in 2022. Profit dove by over 5x to US$23.5 million over the same period.

The reason for the winding up application is unclear, and Chua declined to answer further questions.

Co-founder and CEO Julian Hosp said he found out about the filing on December 6. He said the company is in the process of talking to lawyers about how to dismiss the filing.

“We are advised that we have a strong case for dismissing the winding up application,” he added.

Former employees, who spoke to Tech in Asia on conditions of anonymity, said they were surprised that the situation had deteriorated this far.

“I’m amazed at how emotional they (the co-founders) are and at their inability to protect their investment,” one person said.

Hosp said that while it was “regrettable that such internal disagreements have been brought into the public domain, we are working with all stakeholders to resolve this dispute expeditiously.”