Floki Implements Staking Restrictions in Response to Securities Commission’s Warning in Hong Kong

The Securities and Futures Commission (SFC) in Hong Kong has taken action to prevent users from participating in the Floki memecoin project, labeling it as a “suspicious investment product.” The SFC issued a warning on January 26, cautioning users within its jurisdiction about the Floki and TokenFi staking programs, both of which claimed to offer remarkably high annualized returns ranging from 30% to over 100%. The SFC advised investors to be wary of products that promise returns that seem “too good to be true.” In response, Floki opted to block users based in Hong Kong from joining their staking program. The SFC emphasized that neither of these investment products had been authorized in Hong Kong, stressing that unauthorized schemes receive limited or no protection under the Securities and Futures Ordinance (SFO), and investors could potentially lose all their investments. In an effort to address potential regulatory issues, the Floki team announced measures such as blocking Hong Kong users from the program and placing warnings on the staking sites. They assured users that they would continue to implement these measures until the regulatory concerns were resolved. As of January 29, there was no record of Hong Kong users participating in the staking programs. The Floki team clarified some of the concerns raised by the SFC regarding the high annual percentage yield (APY) by explaining that staking rewards were influenced by market dynamics and could fluctuate based on the token’s market valuation. The team had already paused their offline marketing activities in Hong Kong prior to the project’s launch in December 2023.