Prep: Preheat your oven to 350°F (175°C) and line your cupcake pan.
Toast the Coconut: Spread your coconut flakes on a small baking sheet. Toast in the oven for 3–5 minutes until light golden brown. Set aside to cool completely.
Creaming: In your mixer, cream the butter and sugar until pale and fluffy. Add the egg whites one at a time, followed by the coconut extract.
Combine: Alternately add the dry ingredients and the coconut milk to the butter mixture, mixing just until smooth.
Bake: Divide batter among the 12 cupcake liners. Bake for 18–20 minutes, or until a toothpick comes out clean. Let cool completely.
Frosting: Whip the butter until creamy. Gradually add the confectioners' sugar, coconut milk, and extract. Whip until fluffy and pipe onto the cooled cupcakes.
Garnish: Generously press the toasted coconut flakes into the frosting. Serve and enjoy!