In its recent advisory report, the Hong Kong Securities and Futures Commission (SFC) warned investors to avoid investing their hard-earned money in risky investments. The regulatory watchdog stated that the most hyped crypto products, including the “Floki Staking product” and “TokenFi Staking Program”, were risky.
The regulators described risky investments as financial products that generate high returns or expose the investors to 100% losses.
SFC Warns Customers Against Floking Staking Services
A review of the SFC report demonstrated that the Floki staking program promised the investor 30 to 100% returns annually.
These products captivated investors’ interest in maximizing their profits on crypto investments. The SFC noted that Floki staking services enabled the users to earn rewards by supporting the growth of the blockchain ecosystem.
For years, staking services have proven to be profitable for increasing investor value. The staking process allows the investors to contribute to a shared staking pool and earn a return.
Features of the Floki Staking Program
The report demonstrated that the proof of stake (PoS) mechanism supports the staking process by safeguarding the blockchain ecosystem from external threats. However, with the new rules, the SFC confirmed that these risky investments fail to qualify for public sale in Hong Kong.
The regulators confirmed that after examining the compliance level of Floki staking products, the SFC regretted that the two products would not attain the promised high annualized returns.
Responding to the SFC on the X platform, the Floki team confessed that the two products under question have attained the desired level of success lately. The Floki team stated that the impressive growth of its staking services attracted the attention of SFC to examine compliance with the law.
On X, an anonymous user demand to know whether the Floki product offering meets the regulatory requirements. Commenting on this, the Floki team confessed that the company worked with a renowned marketing agency at the primary development of the Floki staking program and TokenFi products.
Under the partnership agreement, Floki mandates the marketing agency to obtain media space and comply with relevant authorities.
After a lengthy process of launching Floki’s staking products, the company assumed that its new product received regulatory approval. Another X user demands whether Floki will proceed with marketing campaigns in Hong Kong.
Regulators Warn Against Risky Investments
The Floki team claimed that with the regulatory action taken by SFC, it was unclear whether the marketing team would proceed to promote the two staking products. However, after an intense discussion to comply with the law, the Floki team will prioritize meeting the regulatory requirements in Hong Kong.
According to the SFC, the two staking products under probe were available for public sale. After examining the compliance of the two products the regulatory watchdog listed the two products on SFC’s Suspicious Investment Products Alert List.
The listing on the SFC website demonstrated that Floki operated as an unregistered entity in Hong Kong. In the latter, the SFC warned the investors to refrain from investing in Floki staking services due to the firm’s non-compliance.
The SFC suspected that the Floki offering comprised an unauthorized investment portfolio. The regulators argued that Floki’s staking products were high-risk investments and were not regulated as securities or futures products.
Beyond this, the SFC claimed that the Floki staking services will expose the customers to huge losses. The regulators underlined the need to maintain adequate regulatory standards that safeguard investors from exploitative business activities.
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