Hong Kong Flags “TokenFi” and “Floki” Staking Programs

Hong Kong’s Securities and Futures Commission (SFC) cautioned investors against two “suspicious” investment offerings named “TokenFi Staking Program” and “Floki Staking Program.” 

Both products affiliated with the Floki ecosystem offer crypto staking. These programs claim to offer high annualized return targets ranging from 30% to over 100%. However, the SFC emphasized that neither of the products has obtained authorization for public sale in Hong Kong. The watchdog warned that these returns are unrealistic and potentially indicative of fraudulent activity.

According to the SFC, the administrators of these programs have allegedly failed to provide adequate information regarding the feasibility of achieving such high returns. The regulator highlighted that information about these two products is available online to the Hong Kong public. Consequently, on Jan 26, the SFC listed the two products on the SFC’s Suspicious Investment Products Alert List.

The SFC’s warning reminds investors to conduct due diligence and exercise caution when dealing with high-yield investment programs, especially in the volatile realm of virtual assets. The regulator mentioned that individuals participating in such offers would not be protected under the SFC’s rules, leaving them vulnerable to substantial financial losses.

In a weekly update on X (formerly Twitter), the Floki team addressed the SFC development. The crypto platform emphasized that the regulator’s only concern is that the staking programs are too successful. While unable to give details about its talks with the SFC, Floki clarified that it worked with a marketing agency to start the promotions for the Floki Staking Program and TokenFi Staking Program. However, the Floki team has not confirmed whether the marketing campaign will continue in Hong Kong.

The SFC’s warning comes approximately a month after Floki’s intensive two-month marketing campaign in Hong Kong.

FLOKI AND TOKENFI TO DOMINATE HONG KONG IN AGGRESSIVE 2-MONTH MARKETING CAMPAIGN

As part of a new and aggressive campaign to strategically position #Floki and our sister project #TokenFi for dominance in what many believe will be one of crypto’s most explosive bull runs yet,… pic.twitter.com/ENHJ1nqJj1

— FLOKI (@RealFlokiInu) December 12, 2023

Collaborative Efforts to Protect Investors

The SFC and the Hong Kong Police Force (HKPF) collaborated last year to establish a dedicated working group to strengthen enforcement in the evolving sector of Virtual Asset Trading Platforms (VATPs). This collaboration signifies a mutual commitment to protect investors and proactively address the challenges of virtual asset trading. Recently, the SFC issued another warning regarding possible fraudulent activities involving the Hong Kong Digital Research Institute and BitCuped.

Moreover, the SFC emphasized its commitment to enforcing regulatory standards and safeguarding investors from scams. It stated that any violation of the law, like promoting unlicensed investment schemes, will face legal consequences.