Preheat your oven to 350°F (175°C). Grease and flour two 9-inch round cake pans.
In a large bowl, whisk together the gluten-free flour, baking powder, and salt.
In another bowl, beat the sugar and melted coconut oil until well combined. Add the eggs one at a time, beating well after each addition. Stir in the vanilla extract.
Alternately add the flour mixture and coconut milk to the sugar mixture, beginning and ending with the flour mixture. Mix until just combined.
Divide the batter evenly between the prepared pans. Bake for 25 minutes or until a toothpick inserted into the center comes out clean. Let the cakes cool in the pans for 10 minutes, then transfer to a wire rack to cool completely.
For the frosting, beat the softened butter until creamy. Gradually add the powdered sugar, beating until smooth. Add the coconut milk and vanilla extract, and beat until fluffy.
Frost the cooled cakes and sprinkle with shredded coconut. Enjoy!