SFC pointed out that Floki staking programs are not authorized

The Hong Kong Securities and Futures Commission (SFC) has warned the public about risky investment products called “Floki Staking Program” and “TokenFi Staking Program”. Both products are integrated into the Floki ecosystem.

According to the SFC, these products are highly serviceable and they claim to offer annual returns ranging from 30% to 100%. However, the watchdog emphasized that none of the products have been licensed for public sale in Hong Kong.

Staking allows users to earn rewards by contributing to the security of the blockchain. When users hold cryptocurrency, they contribute to the casting pool, similar to depositing money into a savings account. A proof-of-stake mechanism verifies transactions, ensuring blockchain security and decentralization.

https://t.co/K1pdlHVz4E

— FLOKI (@RealFlokiInu) January 27, 2024

The SFC emphasized that the parent of these two products failed to demonstrate convincingly how it intended to achieve the stated maximum annual return targets.

In the X (formerly Twitter) weekly re-lives, Floki's team talked about SFC's progress. CryptoPlatform emphasizes that SFC's only complaint is that the note programs are working too well.

While he could not provide details about his discussions with the SFC, Floki explained that it has partnered with a marketing agency to launch the Floki staking program and TokenFi staking program promotions. The agency confirmed the media spot, and admitted that Floki's team had obtained permission.

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However, Floki's team said they could not comment on whether the marketing campaign would continue in Hong Kong for the time being. The group has assured its investors that it will go through all appropriate means to meet all requirements with the Hong Kong authorities.

The SFC highlights that information about these two products is available online to the Hong Kong public. Therefore, on January 26, 2024, the SFC included both products and their related details in the SFC's Suspicious Investment Products Alert List.

The SFC warns investors about entering into agreements involving digital assets, which may constitute unauthorized collective investment schemes. These arrangements carry significant risks, and investors may have less protection under the securities and futures provisions, which could lead to the loss of entire investments.

In addition, the SFC emphasized its commitment to upholding regulatory standards and protecting investors from fraudulent practices. He mentioned that any violation of the law, including promotion of unlicensed mutual investment schemes, would be subject to appropriate legal action.

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