Floki Defends Staking Program Amid SFC’s Warning

Floki Defends Staking Program Amid SFC’s Warning

by January 30, 2024

Floki, a cryptocurrency project, acknowledged that its staking program was labelled as potentially suspicious by Hong Kong’s Securities and Futures Commission (SFC) on 26 January.

Floki regretted this classification and noted its ongoing efforts since December 2023 to address regulatory concerns with legal advisors. The project aims to comply with laws globally but faces challenges due to the internet’s global nature.

To mitigate regulatory concerns, Floki claims to have warned Hong Kong users against participating and tried to block their access to the program, asserting that no Hong Kong users have joined and that its local marketing was paused.

The SFC’s worries mainly relate to the staking program’s high Annual Percentage Yield (APY). Floki justifies this by explaining its unique reward system, using $TOKEN from its sister project, TokenFi, and not raising funds traditionally, which results in a high APY.

Floki recognises the reward volatility and maintains that its decentralised staking program ensures users retain control over their tokens.

The cryptocurrency project said it respects regulatory bodies and is willing to engage to resolve concerns, but it disagrees with the SFC’s classification if it’s based solely on the high APY.

Featured image credit: Edited from Freepik