Floki has provided a comprehensive response to the public warning from the Hong Kong Securities and Futures Commission (SFC) concerning its staking programs, addressing the concerns raised by the regulatory body.
We just published a response to the Hong Kong SFC's notice about the Floki and TokenFi staking programs.
— FLOKI (@RealFlokiInu) January 29, 2024
The warning, released on January 26th, expressed apprehensions about the high annualized returns promised by Floki’s staking initiatives, namely the “Floki Staking Program” and the “TokenFi Staking Program.”
Floki, in an official statement titled “STATEMENT: RESPONDING TO HK SFC WARNING,” acknowledged the SFC’s notice and conveyed regret that the commission found it necessary to issue the caution.
However, the project clarified that it had been actively collaborating with legal advisors since December 2023 to proactively handle potential regulatory issues associated with its staking programs.
Floki’s HK Measures: Warnings, Blocks & Marketing Shift
The response further explained specific steps taken by Floki in Hong Kong that included warning notices also displayed effectively on the staking websites, implementation of pragmatic mechanisms for blocking Hong Kong users, and suspension of offline marketing activities in Hong Kong.
Further, the SFC pointed out a red flag that had to do with the incredibly high Annual Percentage Yield (APY) of Floki and TokenFi staking programs. In such a dimension, Floki gave an elaborate description of its mechanism for staking.
Floki, in his case, states that the uniqueness of Floki’s staking program would lie in rewarding participants with $TOKENs, which is different from other projects that may use inflation or leave a small percentage aside for staking.
Unlike other projects, where they fundraise through venture capitalists or presales, therefore concentrating rewards in their hands, Floki used no approach to fundraising.
According to the statement, Floki emphasized that there are certain points that the APY has decreased due to the increased number of participants, which directly impacts the market forces of $TOKEN, which are tied to the success and market cap of TokenFi.
Floki then emphasized the decentralization of his staking programs, where he assured users that if Folki were going to disappear as a team, the programs would remain operative and independent on the blockchain.
The underlined statement emphasized equal application of staking rules and emphasized that the team has no say in changing rewards or accessing the users’ tokens.
Despite the detailed response, Floki ensured its transparency and clear manifestations to ensure users that the project would be fully compliant and responsibly engaging with regulators.
Related Reading | Polygon-Powered Immutable zkEVM Mainnet: Early Access Launch