Hong Kong's SFC Issues Warning on High-Risk Floki and Tokenfi Staking Programs

The Hong Kong Securities and Futures Commission (SFC) has raised concerns about the "Floki Staking Program" and "Tokenfi Staking Program," cautioning investors about the potential risks associated with these crypto-related investment products.

SFC's Warning on Unregulated Staking Programs

The SFC warns investors about the enticing yet potentially risky nature of the Floki and Tokenfi Staking Programs, both linked to the Floki ecosystem. These programs promise unusually high annualized returns, ranging from 30% to over 100%. However, the SFC emphasizes that these products lack the necessary authorization for public offering in Hong Kong, posing a risk to potential investors.

Staking and Regulatory Scrutiny

While staking, a process similar to depositing money in a savings account, plays a crucial role in blockchain operations, the SFC suggests that such arrangements might be unauthorized collective investment schemes. The SFC's investigation questions the administrator's ability to demonstrate how the ambitious annualized return targets can be achieved, leading to the inclusion of both programs in the Suspicious Investment Products Alert List.

Floki's Response and Regulatory Compliance

In response to the SFC's concerns, the Floki team acknowledged the regulatory issues during a live recap session on the X. They clarified that the primary concern raised by the SFC was related to the programs' high performance. While confirming collaboration with a marketing agency for program promotion, Floki expressed uncertainty about the continuation of the campaign in Hong Kong, pledging to comply with local regulations.

Investor Caution and Legal Actions

The SFC not only highlights the risk of participating in unregulated schemes but also cautions investors against the allure of "too-good-to-be-true" returns. The regulatory body emphasizes the potential for total loss and minimal protection under the Securities and Futures Ordinance (SFO). The SFC asserts its commitment to taking legal action against any breach of the law, including the promotion of unlicensed collective investment schemes.