Cake Group co-founder files application to wind up company in Singapore
Chua U-Zyn, the co-founder and Chief Technology Officer of crypto firm Cake Group, has officially applied to the Singapore High Court to initiate the winding-up process for the company.
A winding-up notice appeared in Singapore’s The Straits Times on Thursday. U-Zyn is being represented by law firm Rajah & Tann on the matter. The court will now decide whether to grant this application, which was filed on Dec. 1.
Financial struggles
Cake Group is the parent company of the crypto platform Bake, which made headlines last month for announcing significant staff reductions affecting 30% of its workforce. Bake is an automated market maker (AMM) and decentralized exchange (DEX) that revolves around Binance’s BNB Smart Chain (BSC).
In existence for some five years, the platform claims to have over 1 million users worldwide, retaining over $1 billion in customer assets and having achieved reward payouts to date of $411 million.
Cake Group’s financial struggles have been evident, with its revenue plummeting by over half to $266 million in 2022, while profits experienced a fivefold decrease to $23.5 million during the same period. The company generates income through transaction fees.
A hearing for creditors or opposing parties is scheduled for Dec. 22, providing an opportunity for stakeholders to voice concerns or contest the winding-up process.
Internal dispute
While the specifics behind U-Zyn’s winding-up application remain unclear, the decline in financial performance and the recent layoffs are undoubtedly contributing factors.
It’s understood that CEO Julian Hosp learned about the filing on Dec. 6 and has since emphasized that the company is actively working with legal counsel to challenge the application. Hosp will challenge this request in court, asserting that the company’s finances are strong and unrelated to the dispute.
Taking to the X social media platform on Thursday, Hosp wrote:
”Disappointed to see U-Zyn filing a request on December 1st” . . . “For me, it’s selfish that he’s prioritizing his own interests over those of our customers, employees, and partners, instead of resolving it internally.”
Hosp added that U-Zyn’s application is unrelated to the company’s finances and that the firm is financially solvent.
Former employees, speaking anonymously to Tech in Asia, expressed surprise at the escalating situation, describing the co-founders as emotionally charged and seemingly unable to safeguard their investment.
U-Zyn opposed to layoffs
The court filing under Section 125(1)(i) of the Insolvency, Restructuring and Dissolution Act of 2018 adds an element of uncertainty. Unlike other sections that typically specify reasons for winding up, this particular section allows for liquidation if “the Court is of the opinion that it is just and equitable that the company be wound up.”
Hosp clarified that the application is not based on Cake Group’s inability to pay its debts, emphasizing that day-to-day operations continue at full capacity.
It’s understood that the ongoing dispute between U-Zyn and Hosp stems from internal disagreements, particularly related to cuts within the company’s engineering division. Chua claimed Hosp excluded him from decisions, especially concerning the recent layoffs.
Despite the internal discord, Hosp stressed the company’s commitment to resolving the dispute swiftly and maintaining its operational capabilities. Undeterred by his fellow co-founder’s actions, he published a blog post on Thursday, outlining his vision for the Cake Group moving forward.
