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 Bake places the utmost degree of importance on the handling of all crypto assets and cybersecurity. Bake has made significant investments and has taken all necessary steps to ensure that any and all risk factors are mitigated.
As a company, Bake is based in Singapore and in Lithuania. We operate 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 here. Bake UAB operates under the supervision of the Financial Crime Investigation Service (FCIS) and is registered as an official crypto-service provider, see here (available in Lithuanian).
Custody and Asset Segregation
As an organisation Bake doesn’t just ‘talk the talk’ with regards to transparency, it ‘walks the walk’. That’s why Bake practices clear asset segregation, whereby customers’ assets are kept separate from Bake’s operating accounts.
As part of our pledge for transparency, and our general code of conduct and ethics, Bake 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 Bake were to become insolvent, creditors (if any) would have no claim over users’ assets.
In the near future, Bake plans on applying to become a licensed custodian of user assets when the regulatory framework is ready for it to do so.
Bake currently utilises the BitGo Custody wallet solution for all Bake user wallets, as can be seen on Bake’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 Bake’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 Bake. 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).
User assets that are in Liquidity Mining on Bake are deposited and locked in liquidity pools on DeFiChain. As Bake maintains possession and control of the private keys to user assets in DeFiChain’s liquidity pools, it acts as the custodian of such assets.