Crypto News– The team behind the meme-based crypto project Floki has responded to concerns raised by Hong Kong’s regulatory body, the Securities and Futures Commission (SFC), regarding its staking program. After the SFC flagged the token staking program as a suspicious investment product, the Floki team has taken proactive measures to address these concerns.
Floki Team Reacts to Cautionary Notice from Hong Kong Regulator
In a Medium post, the team stated, “We’ve taken steps to mitigate concerns in jurisdictions where the regulatory framework does not specifically cover or cater for the staking programs.” They highlighted that the SFC’s main concern appears to be the high Annual Percentage Yield (APY) offered by the Floki and TokenFi staking programs.
To comply with regulatory requirements in Hong Kong, the Floki team has implemented various measures, including issuing warning notices, blocking access to their staking programs for users from Hong Kong, and halting their offline marketing efforts in the region. These actions aim to ensure that no users from Hong Kong have participated in the staking program thus far. Staking involves locking cryptocurrencies in a blockchain network in exchange for rewards.
Floki Team’s Reaction to Advisory Notice from Hong Kong Regulatory Body
The team further elaborated in their Medium post that the high APY of Floki’s staking program is sustained by a unique reward system utilizing $TOKEN from its sister project TokenFi, a market-responsive APY, a decentralized and community-centric allocation strategy, and the absence of fundraising from venture capitalists (VCs) or presales.
In a December 2022 advisory, the SFC cautioned investors about the high risks and lack of regulation in virtual asset platforms offering deposit, saving, or staking services. They emphasized the potential for significant losses and urged investors to exercise caution, clarifying that these arrangements are not regulated like bank deposits and offer no investor protection.