Place shredded coconut into a hot dry skillet over medium heat. Continuously shake and stir the coconut around until it is evenly golden. Place onto a plate to cool off to room temperature.

Preheat oven to 350°F. Prepare 2 cupcake pans (24 total cupcakes) with cupcake liners. In a large mixing bowl, add the flour, baking soda, baking powder, and salt. Whisk together to combine. Set aside.

In another large bowl, add eggs, brown sugar, coconut milk, vegetable oil, vanilla, coconut extract, and vinegar. Whisk together until smooth and well combined.

In a small mixing bowl or 2-cup liquid measuring cup, add the hot coffee and cocoa powder. Whisk together until well-combined and smooth. Allow to sit for 2 minutes, then add the cocoa mixture into the mixing bowl with the wet ingredients (eggs, coconut milk, etc.), then mix until smooth.

Add the wet ingredients into the bowl with the dry ingredients, and mix until smooth. Fold in the 1/2 cup of toasted coconut. Pour the cake batter into the prepared cupcake pans, filling 2/3 full, and bake for 18-20 minutes or until an inserted toothpick comes out clean. Allow to cool completely before frosting.

Add butter to a stand mixer fitted with the whisk attachment. Beat on high until butter is doubled in volume, and looks light and fluffy – about 4-5 minutes.

Turn the stand mixer to low and slowly add the confectioners sugar. Beat until completely incorporated, then add in the coconut milk, vanilla, and coconut extract. Beat until well-combined, fully incorporated, and fluffy looking.

Pipe the frosting onto each cooled cupcake, then immediately heavily sprinkle the remainder of the toasted coconut onto the frosting.