Floki Crypto Project Addresses Hong Kong Regulator's Concerns

According to CoinDesk, the team behind the meme-based crypto project Floki is taking steps to address concerns raised by Hong Kong's Securities and Futures Commission (SFC) after the token staking program was placed on its list of suspicious investment products. In a Medium post, the team stated that they have implemented measures to mitigate concerns in jurisdictions where the regulatory framework does not specifically cover or cater for staking programs. These measures include warning notices, blocking Hong Kong users from participating in their staking programs, and pausing their offline marketing campaign in the region, ensuring no Hong Kong users have joined the program to date. Staking involves locking cryptocurrencies in a blockchain network in return for rewards. The Floki team explained that their staking program's high annualized percentage yield (APY) is sustained by a unique reward system using $TOKEN from its successful sister project TokenFi, a market-responsive APY, a decentralized and community-centric allocation strategy, and no fund-raising from VCs or presales. In a December 2022 post, the SFC warned investors about the high risks and unregulated nature of virtual asset platforms offering deposit, saving, or staking services, emphasizing potential significant losses and advising caution. The SFC stated that while some virtual assets arrangements are commonly labeled or marketed as 'deposits' or 'savings' products, they are not regulated and do not offer the same protection as bank deposits.