The Floki Inu (FLOKI) ecosystem has addressed the recent warning issued by the Hong Kong Securities and Futures Commission (SFC) regarding its staking program. The SFC flagged Floki and TokenFi Staking Program as potentially suspicious investment products on January 26, 2024.
In response to the SFC’s concerns, Floki expressed disappointment with the aggressive enforcement actions and detailed the proactive measures taken to ensure compliance with Hong Kong regulations:
– Prominent warnings have been prominently displayed on the Floki and TokenFi staking websites to advise Hong Kong users of their ineligibility to participate in the staking program.
– Practical measures have been put in place to prevent Hong Kong users from accessing and participating in the staking program.
– The community has committed to barring Hong Kong users from engaging in the staking program until regulatory matters are resolved, with no record of participation to date.
– The planned launch of an offline marketing campaign in Hong Kong has been put on hold.
The SFC’s primary concern seems to revolve around the high Annual Percentage Yield (APY) offered by the Floki and TokenFi cryptocurrency staking programs. In response, Floki clarified two key reasons for the elevated APY:
– Funds were not obtained through traditional channels such as Venture Capitalists or presales, which would have potentially concentrated token ownership among VCs and presale buyers. Instead, a majority of the TokenFi token supply was allocated to users who participated in staking.
– A substantial portion of the TokenFi supply was allotted to Floki stakers, ensuring that rewards are directed towards supporters of the FLOKI ecosystem, rather than being confined to VCs. This equates to substantial rewards for those staking FLOKI and TOKEN over a four-year period, based on the market cap and market dynamics.
It is important to note that the rewards are denominated in TOKENS, TokenFi’s tradable utility token, and are subject to market volatility. Staking returns may fluctuate based on the market prices of TOKEN.
Contrary to popular belief, Floki actually reported the SFC’s warning a few days before the statement was issued. Floki referred to the impending statement from Hong Kong authorities as a positive development. This demonstrates a commitment to transparency and cooperation with regulatory bodies in the cryptocurrency and token staking space.
