SINGAPORE – A co-founder of Cake Group, which operates a cryptocurrency investment platform, has filed for the company to be wound up amid a shareholder dispute.
A winding up notice in The Straits Times on Dec 7 showed that the company’s co-founder, shareholder and chief technology officer Chua U-Zyn, represented by law firm Rajah & Tann Singapore, had filed an application with the High Court on Dec 1.
The hearing has been fixed for Dec 22.
In a statement issued to ST, the group’s co-founder and chief executive Julian Hosp said the group will seek to dismiss the court application as it has “a strong case”.
He said the court application stemmed from “internal disagreements” to do with the company’s restructuring that was announced in mid-November.
Dr Hosp said the group was informed of Mr Chua’s court application on Dec 6.
He stressed that the group “is solvent and financially strong”, has ongoing business activities, can meet its obligations, that its assets exceed the liabilities, and the proof of reserves shows customer funds remain backed on a one-to-one basis.
Dr Hosp said: “It is important to note that the winding-up application has been commenced on the basis that it is just and equitable to wind up Cake Group in connection with the dispute between shareholders.
“In other words, the winding up application has not been brought on the grounds that Cake Group is unable to pay its debts.”
He also said he remains committed as the chief and that the day-to-day operations remain unaffected.
The dispute comes after the group in mid-November announced it would cut 30 per cent of its staff.
Dr Hosp had said in a Nov 14 blog that 52 people would be cut in a restructuring exercise across the Singapore and Kuala Lumpur offices.
This would bring the team down to about 125.
Dr Hosp had said the team grew quickly in 2020 and 2021, when the digital assets market was buoyant.
“We grew operating costs too quickly. We underestimated both the longevity and extent of a broader slowdown in the crypto landscape, and the impact it would have on investor sentiment,” he wrote.
The saga comes in the wake of a crypto winter that some are hoping will taper off soon as institutional players enter the scene, either focusing on tokenisation of real world assets like bonds and securities or issuing their own stablecoins.
The sector’s downturn started in 2022 with the fall of many known names in the cryptocurrency space, including the Terra/Luna tokens, hedge fund Three Arrows Capital and exchange FTX.
