In a recent announcement responding to regulatory scrutiny, the Floki Inu crypto team “blocked” its staking programs in Hong Kong. This decision follows a warning from the Hong Kong Securities and Futures Commission (SFC), which labeled Floki’s high-yield staking products as “suspicious” and unauthorized.
The regulatory body’s action marks a pivotal moment for cryptocurrency, known for its popularity in the memecoin market.
Floki Inu: Regulatory Warnings Prompt Immediate Action
The SFC’s warning against Floki Inu, issued last Friday, raised concerns over the legitimacy of the crypto’s staking programs. These programs, known for offering annual returns ranging from 30% to over 100%, drew the regulator’s attention due to their high-yield promises.
The SFC explicitly stated that these products had not received authorization for “offering to the public in Hong Kong.”
In response, the Floki Inu team took swift action. They issued a statement on their blog detailing measures to restrict Hong Kong users from accessing these staking programs. Additionally, they placed explicit warnings on their website to inform users from Hong Kong about their ineligibility to participate.
The team also mentioned that their offline marketing campaign in Hong Kong, scheduled to launch in December 2023, had been halted before its initiation.
The Floki Inu team stood by their high-yield staking programs, explaining that their ability to offer high returns was due to most of the token supply being allocated to stakers rather than to venture capital firms or large presales.
They emphasized that the rewards from the staking program were subject to the market price of TOKEN, the utility token of “Floki’s sister project” TokenFi, which is influenced by “market forces” beyond their control.
They further clarified that the staking program rewards stakers with TOKEN without minting new supplies, thus maintaining its integrity.
The Floki Inu team also reassured that there was no “confusion among users” regarding the operation of the staking program and that they did not exercise any control over the assets staked, the staking agreements, or the distribution of rewards.
Hong Kong’s Latest Crypto Development
The regulatory environment in Hong Kong contrasts with recent developments in the US. Following the US Securities and Exchange Commission (SEC)’s approval of the first set of spot Bitcoin ETFs, Harvest Fund Hong Kong has submitted an application for a Bitcoin spot ETF to the Hong Kong SFC.
This move could begin a new era in crypto trading in the region. There are speculations that the operational models of spot ETFs in Hong Kong might differ from those in the US, particularly regarding the feature of Bitcoin redemptions “in kind.”
This could provide a unique opportunity for investors in the region, although, as reported, official confirmation from the SFC is still pending.
Fátured image from Unsplash, Chart from TradingView