The Securities and Futures Commission of Hong Kong issued a warning to investors on Friday regarding “suspicious” staking schemes associated with Floki and TokenFi, both tokens operating within the Floki ecosystem. These schemes promise annual returns ranging from 30% to 100%, but the regulatory body cautioned against them.
It was pointed out that neither Floki nor TokenFi’s staking products have received the necessary authorization for public offerings, as stated in the announcement. Additionally, there has been no clear demonstration by the product administrators regarding the feasibility of achieving such high annualized returns.
What are Floki and TokenFi?
Floki and TokenFi play pivotal roles within the broader Floki ecosystem, which is designed to offer various utilities for the FLOKI token.
TokenFi is a versatile tokenization platform that has been accessible on both Ethereum and Binance Smart Chain since its launch on October 27, 2023.
While each of them has its unique staking programs, there is a close interconnection between the two. Within the Floki framework, stakers have the opportunity to access a significant portion of TokenFi’s token supply. Conversely, TokenFi stakers can earn TOKEN rewards through an intuitive user interface.
As of the time of the SFC announcement, Floki had not responded to Cryptonews’ request for comment.
Both of these products were included in the SFC’s Suspicious Investment Products Alert List on January 26.
Floki Staking Scheme Alert Follows High-profile Hong Kong Campaign
The Securities and Futures Commission’s announcement follows Floki’s intensive two-month marketing campaign in Hong Kong by approximately one month.
During this campaign, Floki and TokenFi were promoted across various platforms in Hong Kong, including tramcars, digital city bus screens, and locations near upscale accommodations and office towers.
In response to this development, the regulator advised investors to exercise caution when dealing with products that promise returns that seem “too good to be true” and to remain vigilant in their investment decisions. The announcement also stated that the agency would take appropriate actions in cases of any legal violations.
It’s important to note that Hong Kong has a reputation for its stringent approach to cryptocurrency licensing. The SFC has previously cautioned against unregulated activities, even though some platforms have claimed to have applied for licenses, as compliance issues persist.
In early 2023, Hong Kong launched a licensing program and lifted its ban on crypto trading, with the aim of establishing itself as a cryptocurrency hub.
