SFC in Hong Kong has issued a warning about the Floki Staking Program and the TokenFi Staking Program.
The Securities and Futures Commission (SFC) of Hong Kong has issued a warning to the general public regarding two investment products that have the potential to be dangerous.
The SFC has named these products the “Floki Staking Program” and the “TokenFi Staking Program.” Both of these goods are connected within the Floki ecosystem.
The SFC asserts that these products provide staking services and makes claims that they may yield annualized returns that range from thirty percent to more than one hundred percent.
However, the relevant authorities in Hong Kong had not authorized the sale of any of these goods to the general public, as underlined by the watchdog. Users can receive rewards through the process of staking by contributing to the security of the blockchain.
The act of contributing to a staking pool, which is analogous to putting money into a savings account, is precisely what happens when users stake cryptocurrency.
The proof-of-stake system is responsible for validating transactions, which helps to ensure that the blockchain is secure and decentralized.
The Securities and Futures Commission highlighted that the governing body of these two products cannot credibly demonstrate how it expects to achieve the stated high annualized return targets.
The Floki team discussed the SFC development during the weekly review live spaces held on the X (formerly known as Twitter). The cryptocurrency platform stressed that the sole criticism that the SFC has is that the staking systems function a great deal better than expected.
Although it was unable to offer specifics regarding its negotiations with the SFC, Floki explained that it worked along with a marketing agency to launch the Floki Staking Program and the TokenFi Staking Program advertising.
The Floki team assumed they had received approval, and the agency successfully secured media space. On the other hand, the Floki team stated that they could not comment on whether or not the marketing effort would continue in Hong Kong in the foreseeable future.
With the assurance that it would go through all of the right processes to complete all of the criteria with the Hong Kong authorities, the team assured its investors.
The SFC’s statement emphasizes that the general public in Hong Kong can access information about these two products over the Internet. Consequently, on January 26, 2024, the Securities and Futures Commission (SFC) added both items and the pertinent information about them to the Suspicious Investment Items Alert List.
Regarding staking deals involving digital assets, the Securities and Futures Commission (SFC) warns investors that these deals could be considered unauthorized collective investment schemes.
Because of the substantial risks associated with these arrangements, investors may have very little protection under the Securities and Futures Ordinance, which could result in the total loss of their money.
In addition, the Securities and Futures Commission (SFC) has asserted its dedication to the enforcement of regulatory standards and the protection of investors against fraudulent schemes.
The SFC stated that it would take necessary legal action in response to any law violation, including the marketing of unregistered collective investment schemes.
