Hong Kong Financial Watchdog Cautions Against Floki, TokenFi Staking Schemes
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On Friday, Hong Kong’s securities regulator cautioned investors against “suspicious” staking schemes tied to Floki and TokenFi.
Both tokens within the Floki ecosystem offer crypto staking.
They claim yearly returns of between 30% and 100%, the Securities and Futures Commission warned.
Both Floki and TokenFi’s staking products have not been granted authorization for public offering, the announcement said.
Further, the products’ administrator has not convincingly demonstrated how these high annualized returns can be achieved.
What are Floki and TokenFi?
Floki and TokenFi are key parts of the broader Floki ecosystem, which aims to provide diverse utilities for the FLOKI token.
TokenFi is a multichain tokenization platform available on Ethereum and Binance Smart Chain since its launch on Oct. 27, 2023.
While both have distinct staking programs, they are closely linked. Under the Floki scheme, stakers can access a substantial share of TokenFi’s supply. Meanwhile, TokenFi stakers earn TOKEN rewards via a user-friendly interface.
Floki didn’t return Cryptonews’ request for comment on the SFC announcement by press time.
Both products were added to the SFC’s Suspicious Investment Products Alert List on Jan. 26.
Floki Staking Scheme Alert Follows High-profile Hong Kong Campaign
The SFC’s announcement comes about 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
The campaign promoted Floki and TokenFi on various platforms in Hong Kong, including tramcars, digital city bus screens, and near upscale accommodations and office towers.
The regulator advised investors to be careful with products that promise “too-good-to-be-true” returns and to stay sharp when making investment choices. It added that the agency would take “appropriate actions where there is any breach of the law.”
Hong Kong is known for its strict approach to crypto licensing.
The SFC has previously warned platforms against unregulated activities. Despite some claiming to have applied for licenses, compliance issues remain.
Hong Kong launched a licensing program in early 2023 and lifted its crypto trading ban, aiming to become a crypto hub.
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