This is usually the first question asked when entrusting your hard-earned funds with any cryptocurrency service provider — as it should be. But rest assured as Cake DeFi places the utmost degree of importance on the handling of all crypto assets and cybersecurity. Cake DeFi has made significant investments and has taken all necessary steps to ensure that any and all risk factors are mitigated.
As a company, Cake DeFi (Cake Pte. Ltd.) is based in Singapore, and operates under an exemption pursuant to the Payment Services (Exemption for Specified Period) Regulations 2019. It is pending the approval of its license application by Singapore’s financial regulator, the Monetary Authority of Singapore (MAS), see: https://www.mas.gov.sg/regulation/payments/entities-that-have-notified-mas-pursuant-to-the-ps-esp-r).
Custody and Asset Segregation
As an organisation Cake DeFi doesn’t just ‘talk the talk’ with regards to transparency, it ‘walks the walk’. That’s why Cake DeFi practices clear asset segregation, whereby customers’ assets are kept separate from Cake DeFi’s operating accounts.
As part of our pledge for transparency, and our general code of conduct and ethics, Cake DeFi has emplaced specific safeguards to ensure that it cannot and will not misappropriate any user assets by utilising them for its own purposes. This includes, but is not limited to operating expenses or maintaining product liquidity. As such, if Cake DeFi were to become insolvent, creditors (if any) would have no claim over users’ assets.
In the near future, Cake DeFi plans on applying to become a licensed custodian of user assets when the regulatory framework is ready for it to do so.
Cake DeFi Wallet
Cake DeFi currently utilises the BitGo Custody wallet solution for all Cake DeFi user wallets, as can be seen on Cake DeFi’s ‘Balances’ page.
As a highly reputable and trusted service provider, BitGo offers one of the most secure and trusted crypto wallets in the industry (see: https://www.bitgo.com/services/custody/wallet-platform/ for more details).
This entails having multi-signature (multisig) requirements for both company and user assets. All crypto movements require multisig approvals by Cake DeFi’s management team.
Staking and Freezer
User assets that are in Staking or in the Freezer are being staked in masternodes, which are operated by Cake DeFi. As the company is in possession of, and controls the private keys to user assets being staked, it acts as the custodian of such assets.
Hosted masternodes that operate on the internet on a 24/7 basis do not contain collaterals. Collaterals (i.e. user assets) are held in secure private wallets that are entirely segregated from the internet (i.e. cold wallet).
Liquidity Mining
User assets that are in Liquidity Mining on Cake DeFi are deposited and locked in liquidity pools on DeFiChain. As Cake DeFi maintains possession and control of the private keys to user assets in DeFiChain’s liquidity pools, it acts as the custodian of such assets.
Lending (formerly Lapis)
We’re working hard to restructure our Lending service by finding the right DeFi lending protocol, to provide users with full transparency and stable yields, but it will take time. We’ve called back all funds lent on behalf of our customers from partners to ensure they are 100% safe, and they can be verified via addresses found on our Transparency page - under ‘Lending’.
In the meantime, our Lending service is still available, where the yield is generated from Earn & Liquidity Mining on DeFiChain, and the returns are then paid back to users from our own revenue as part of our operational budget. The Lending funds are not borrowed or used as leverage, so rest assured that they remain safe with us.