SFC flags Floki staking programs as unauthorized

Must read

Nvidia posts record $60 billion in revenue amid increased demand for AI, accelerated computing

Nvidia reported increased demand for generative artificial intelligence (AI) and accelerated computing in its latest earnings report on Feb. 21.Jensen Huang, founder and CEO...

S&P Global warns of spot Ethereum ETFs’ impact on staking concentration

The potential approval of spot Ethereum (ETH) exchange-traded funds (ETFs) in the US, which includes plans for staking, might amplify concentration risks within the...

Sam Bankman-Fried dismisses conflict-of-interest concerns after changing lawyers

Sam Bankman-Fried dismisses conflict-of-interest concerns after changing lawyers Assad Jafri · 2 hours ago · 2 min read ...

Top SEC crypto lawyer leaves to join pro-crypto firm, regulator facing new lawsuit

A key member of the US Securities and Exchange Commission’s (SEC) legal team, Ladan Stewart,  stepped down from her role at the agency to...

The Floki team assured its investors it would go through all appropriate channels to fulfill all requirements with the Hong Kong authorities.

2350 Total views

4 Total shares

SFC flags Floki staking programs as unauthorized

The Hong Kong Securities and Futures Commission (SFC) has cautioned the public about potentially risky investment products called “Floki Staking Program” and “TokenFi Staking Program.” Both products are affiliated with the Floki ecosystem.

According to the SFC, these products offer staking services and claim to deliver annualized returns ranging from 30% to over 100%. However, the watchdog emphasized that neither of the products has received authorization for public sale in Hong Kong.

Staking allows users to earn rewards by contributing to the blockchain’s security. When users stake cryptocurrency, they contribute to a staking pool, akin to depositing money into a savings account. The proof-of-stake mechanism validates transactions, ensuring the security and decentralization of the blockchain.

https://t.co/K1pdlHVz4E

— FLOKI (@RealFlokiInu) January 27, 2024

The SFC emphasized that the governing body of these two products has failed to convincingly show how it intends to achieve the stated high annualized return targets.

In its weekly recap live spaces on the X (formerly Twitter), the Floki team addressed the SFC development. The crypto platform emphasized that the SFC’s only complaint is that the staking programs perform too well.

While unable to provide specifics about its discussions with the SFC, Floki clarified that it collaborated with a marketing agency to initiate the Floki Staking Program and TokenFi Staking Program promotions. The agency secured media space, and the Floki team believed it had received approval.

Related: Finnish authorities traced Monero transactions tied to Vastaamo hack

However, the Floki team said they could not speak on whether the marketing campaign would continue for the time being in Hong Kong. The team assured its investors it would go through all appropriate channels to fulfill all requirements with the Hong Kong authorities.

The SFC highlights that information about these two products is available online to the Hong Kong public. Consequently, on Jan. 26, 2024, the SFC included both products and their relevant details on the SFC’s Suspicious Investment Products Alert List.

The SFC cautions investors about staking deals involving digital assets, which might constitute unauthorized collective investment schemes. These arrangements carry high risks, and investors may have minimal protection under the Securities and Futures Ordinance, potentially leading to a complete loss of investments.

Additionally, the SFC has emphasized its commitment to enforcing regulatory standards and protecting investors from fraudulent schemes. It mentioned that any breach of the law, including the promotion of unlicensed collective investment schemes, will be met with appropriate legal action.

Magazine: Ethereum restaking: Blockchain innovation or dangerous house of cards?

More articles

Latest article

Nvidia posts record $60 billion in revenue amid increased demand for AI, accelerated computing

Nvidia reported increased demand for generative artificial intelligence (AI) and accelerated computing in its latest earnings report on Feb. 21.Jensen Huang, founder and CEO...

S&P Global warns of spot Ethereum ETFs’ impact on staking concentration

The potential approval of spot Ethereum (ETH) exchange-traded funds (ETFs) in the US, which includes plans for staking, might amplify concentration risks within the...

Sam Bankman-Fried dismisses conflict-of-interest concerns after changing lawyers

Sam Bankman-Fried dismisses conflict-of-interest concerns after changing lawyers Assad Jafri · 2 hours ago · 2 min read ...

Top SEC crypto lawyer leaves to join pro-crypto firm, regulator facing new lawsuit

A key member of the US Securities and Exchange Commission’s (SEC) legal team, Ladan Stewart,  stepped down from her role at the agency to...

Montenegro high court greenlights Do Kwon’s extradition to US

Montenegro’s High Court has decided to extradite former crypto magnate Do Kwon to the US instead of his home country, South Korea, local media...