Hong Kong's SFC Warns Public About Risky Floki-associated Staking Programs
Summary:
Hong Kong's Securities and Futures Commission (SFC) has issued a public warning about the high-risk investment products "Floki Staking Program" and "TokenFi Staking Program", both linked to the Floki protocol, which have not received approval for public sale. Despite promising high annual returns, the regulatory body has questioned the feasibility of these lofty targets. Furthermore, the SFC has cautioned investors about potential risks related to staking deals and reaffirmed its commitment to enforce regulatory standards and protect investors from fraudulent schemes.
The public has been warned by Hong Kong's Securities and Futures Commission (SFC) about potentially high-risk investment products known as "Floki Staking Program" and "TokenFi Staking Program," both of which are connected to the Floki protocol. The SFC stated that these products provide staking services and propose annual returns from 30% to beyond 100%. In spite of these promises, the SFC stressed that these products have not been approved for public sale in Hong Kong. Staking permits participants to gain earnings by contributing to the security of the blockchain, with cryptocurrency staking likened to saving money in a bank. The security and decentralization of blockchain are maintained by the proof-of-stake mechanism which validates transactions.
The SFC underscored that the operators of these two products have been unable to persuasively demonstrate to the SFC of Hong Kong how they plan to attain the high annual returns. During its weekly review live on X social media platform, the Floki team addressed the Hong Kong SFC's concerns. The cryptocurrency platform pointed out that the SFC's only issue is the over-performance of the staking programs. Although it didn't disclose details about its interactions with the SFC, Floki acknowledged its partnership with a marketing firm to initiate promotions for the Floki Staking Program and TokenFi Staking Program. Despite believing they received approval, the team was unable to comment on the future of the marketing campaign in Hong Kong. Nevertheless, team members reassured investors that they would comply with all regulations necessary in Hong Kong.
The relevant details about these two products are indeed available online for the Hong Kong public, according to the SFC, prompting it to include both products in its Suspicious Investment Products Alert List on January 26, 2024. The financial regulator advises that virtual asset staking deals may constitute unauthorized collective investments posing serious risks. Investors may be granted limited protection under the Securities and Futures Ordinance (SFO), increasing the possibility of total investment losses. Moreover, the SFC reiterated its dedication to upholding regulatory norms and safeguarding investors against scam schemes, confirming that any violations, including the promotion of illicit collective investment plans, would face suitable legal repercussions.
Published At
1/28/2024 12:08:04 PM
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