Floki Inu responds to regulatory warning, blocks users from Hong Kong
The Hong Kong Securities and Futures Commission issued a statement cautioning investors on staking programs from Floki Inu and TokenFi.
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Hong Kong’s securities regulator has raised concerns over the high yields offered by two crypto-staking platforms, prompting meme coin project Floki Inu to block users in the region from participating in their yield programs.
The Hong Kong Securities and Futures Commission (SFC) issued a statement on January 26, cautioning investors on staking programs from Floki Inu and TokenFi. The regulator said annual returns exceeding 30% were suspicious, and investors should be wary of yields that seem too good to be true.
In response, the team behind Floki Inu announced several measures, including barring Hong Kong-based users from joining its staking program. The team said they have placed warnings on their website and TokenFi’s site to inform users from Hong Kong that they need to be eligible.
“The main reason the Floki and TokenFi staking APY is so high is because we opted not to raise tens of millions of dollars from VCs or presales.” the Floki Inu team clarified in a blog post.
The SFC took particular issue with the advertised high annual percentage yields (APYs) offered by the two staking programs. Floki Inu defended its yields by stating they are volatile and influenced by market dynamics. The project also noted that staking reward values fluctuate based on the token’s market price.
“As a responsible community, we will continue to implement those measures to prevent Hong Kong users from joining the staking program until the relevant regulatory issues have been resolved,” the Floki Inu team noted.
Crypto staking yields have declined over the past year as interest rates have risen globally. However, certain niche protocols focused on maximizing yields through leverage and other means continue to offer triple-digit returns.
Regulators worldwide are still assessing how to oversee and regulate various crypto yield offerings. The intense scrutiny from Hong Kong’s SFC highlights the uncertainties around staking programs and how different jurisdictions may choose to approach them.
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