Floki Memecoin Staking Plans Flagged by Hong Kong's SFC; Team Responds with Preventive Measures
Summary:
The Hong Kong Securities and Futures Commission (SFC) has warned investors about the Floki memecoin's staking plans, citing suspicious activities and impossibly high annual returns. In response, Floki has disallowed Hong Kong-based users from joining its scheme. The Floki team has taken actions to address the SFC's concerns, working with legal advisors and issuing alerts on the Floki and TokenFi staking websites to warn Hong Kong-based users about their ineligibility. Floki's team also explained their reasons for promising high Annual Percentage Yields, attributing it to the volatile and market-driven nature of the token rewards.
Hong Kong's Securities and Futures Commission (SFC) has labeled the Floki memecoin initiative, featuring a dog theme, as dubious investment offerings and consequently, has prevented users from further investment. On January 26, the SFC alert warned its stakeholders about Floki and TokenFi staking plans which claim to yield an annualized return rate ranging from 30% to over 100%. The SFC stressed that investors should be sceptical of such seemingly improbable returns. Following the warning from SFC, Floki has disallowed any Hong Kong-based users to participate in its staking scheme.
The SFC also brought attention to the fact that neither of these investment propositions have formal authorization in Hong Kong. The SFC advised that unauthorized investment plans are minimally protected under its Securities and Futures Ordinance (SFO), and consequently, their investors potentially risk losing their entire investments.
In response to the SFC's notification on Floki and TokenFi staking plans, the Floki team shared their views, talking about the reasons for the sustainable high APY of $FLOKI and $TOKEN and laying out their future plans.
Reacting to the SFC's warning, the Floki team decided to restrict its Hong Kong-based users from the scheme and declared their joint efforts with legal advisors in a blog post on January 29, aimed at ironing out the possible legal hurdles for the staking initiative. The Floki team further confirmed issuing warnings on Floki and TokenFi staking platforms cautioning Hong Kong users about their ineligibility for participation. They stated, "We, being a responsible community, will continue to restrict Hong Kong users from participation in the staking plans until all relevant regulatory obstacles are sorted out."
They also confirmed that as of January 29, there was no record of Hong Kong users participating in the staking plans. Furthermore, they mentioned they stopped their offline promotions in Hong Kong over a month before it started in December 2023. Finally, to quell the SFC's prime concern about the unusually high annual percentage gain (APY), the Floki team provided several justifications showing how the volatility of the rewards was influenced by market forces directly impacting the token rewards' market valuation.
Published At
1/30/2024 2:40:06 PM
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