Two staking programs, “Floki Staking Program” and “TokenFi Staking Program,” have come under fire from the Hong Kong Securities and Futures Commission (SFC). The financial regulator characterized both staking products as “suspicious,” and they are both associated with the Floki protocol.
Both the Floki Staking Program and the TokenFi Staking Program assert to have “high annualized return targets of 30% to over 100%,” according to a press release from the SFC. Nevertheless, the regulator emphasized that neither cryptocurrency product has been authorized in Hong Kong as of yet.
One way that bitcoin holders might receive rewards while also supporting the functioning of a blockchain is via staking. Owners may increase their bitcoin earnings by locking their assets in a staking pool for a defined duration.
The SFC has said that the Floki protocol has failed to adequately show how its staking programs may accomplish high annualized return goals. Financial regulators took notice, and on January 26, they placed the items on their Suspicious Investment Products Alert List.
Additionally, the SFC sternly warned investors in “staking” arrangements related to digital assets that such arrangements might result in illegal collective investment schemes and pose a significant risk to investors. Moreover, the bank watchdog stated:
Be wary of financial products that promise returns that seem too good to be true, and use extreme caution when choosing investments.
Finally, the SFC reaffirmed its resolve to safeguard the Hong Kong people against deceitful schemes and guarantee compliance with regulatory requirements.
The Floki team responded to the SFC’s claims about its staking products in their weekly X platform report on January 27. There were hints that the protocol had been in touch with the Hong Kong regulator on this.
The group did not go into detail on their discussions with the SEC, but they did state that they were working with a marketing firm to launch ads for the staking products. According to the process, the marketing agency thought it had clearance after it obtained media space.
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