The Hong Kong Securities and Futures Commission (SFC) has issued a stern warning to the public about two staking products named the “Floki Staking Program” and the “TokenFi Staking Program.” Both staking products, which the financial regulator described as “suspicious,” are affiliated with the Floki protocol.
Hong Kong’s SFC Issues Warning About Staking
In a media release, the SFC mentioned that the Floki Staking Program and the TokenFi Staking Program claim to offer “high annualized return targets of 30% to over 100%.” However, the regulator stressed the fact that both cryptocurrency products are yet to receive authorization in Hong Kong.
Staking is an avenue for cryptocurrency holders to earn rewards while supporting the operation of a blockchain. Owners earn more cryptocurrency when they send their crypto assets to be locked in a staking pool for a specific period of time.
According to the SFC, the Floki protocol has not been able to satisfactorily demonstrate how its staking programs can achieve high annualized return targets. As a result, the financial watchdog added the products to its Suspicious Investment Products Alert List on Friday, January 26.
Furthermore, the SFC issued a stern warning to investors on “staking” arrangements tied to digital assets, as they could pose high risk and result in unauthorized collective investment schemes. The financial regulator added:
Investors should also be cautious about investment products that claim to offer “too-good-to-be-true” returns and stay vigilant when making investment decisions.
In the end, the SFC reinforced its commitment to ensuring regulatory standards are met and protecting the Hong Kong public from fraudulent schemes.
Floki Team Addresses ‘Suspicious Product’ Claim
On Saturday, January 27, the Floki team addressed the SFC’s statements on its staking products in a weekly recap space on the X platform. The protocol hinted to have been having conversations with the Hong Kong regulator on the matter.
Although the team didn’t divulge much information about its talks with the Securities and Futures Commission, it did mention its collaboration with a marketing agency to start promotions of the staking products. The protocol claims it believed it had received approval after the marketing agency secured media space.
Going forward, the Floki team noted that it could not ascertain on whether the marketing campaign for the Floki Staking Program and the TokenFi Staking Program will continue in Hong Kong. However, the protocol promised investors that it would ensure to fulfill all necessary provisions with the regulatory authority.
As of this writing, the Floki Inu token is valued at $0.00002922, reflecting a 1.1% price jump in the past day.
Floki price hovers around $0.00003 on the daily timeframe | Source: FLOKIUSDT chart on TradingView
Featured image from Unsplash, chart from TradingView
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Author: Opeyemi Sule
