Singapore-based Cake Group, the parent company of the crypto platform Bake, is undergoing liquidation as it has filed for winding up, according to a report from Tech in Asia. The founder of the crypto investment platform, U-Zyn Chua, has applied for the winding-up process at the Singapore High Court.
The specific reasons for the company’s decision to wind up are not clear. However, in September, the Bake crypto platform, formerly known as Cake DeFi, announced layoffs affecting 30% of its workforce. At that time, Bake attributed the staff reductions to a reorganization prompted by the prevailing bear market conditions and individual performance issues. The winding-up filing may be a further step in response to the challenges faced by the company.
In the liquidation application, U-Zyn Chua has positioned himself as the plaintiff, and the defendant is listed as the Cake Group.
The winding-up process in Singapore is a legal procedure where the court mandates the sale of a company’s assets to settle its debts. After settling all liabilities, any remaining funds from the asset sales are distributed among the company’s shareholders.
The liquidation claim is being filed under the Singaporean Insolvency, Restructuring and Dissolution Act of 2018, according to the court filing.
A hearing for creditors or those opposing the company’s winding-up is scheduled for December 22. This hearing will provide an opportunity for interested parties to present their perspectives on the liquidation process.
Cake Group’s Revenue Slump
Cake Group experienced substantial growth in 2021, in line with the trend observed across many decentralized finance (DeFi) platforms during that period. The company released an unaudited financial statement indicating impressive results, with revenue reaching $631 million, reflecting a remarkable year-on-year increase of 1,800%. The Group’s operating income for the year amounted to $203 million.
However, in the wake of the significant cryptocurrency market crash in May 2022 and the ensuing extended period of lower crypto prices, the growth trajectory underwent a gradual decline. Co-founder Julian Hosp revealed that the company’s revenue dropped to $266 million in 2022, and profits saw a decline from $134 million in 2021 to $23.5 million. This downturn in financial performance is indicative of the challenges faced by crypto-related businesses during the market downturn and the subsequent crypto winter.