Floki responds to Hong Kong SFC warning, clarifies staking programs and APY

In response to the recent notice issued by the Hong Kong Securities and Futures Commission (SFC) regarding the Floki and TokenFi staking programs, the Floki team has issued a comprehensive response.

Addressing concerns raised by the regulatory body, the team elucidates on the sustainability of the high Annual Percentage Yield (APY) offered by the staking programs and outlines measures taken to ensure compliance with regulatory frameworks.

Hong Kong marks Floki staking programs as suspicious products

In its notice, Hong Kong’s Securities and Futures Commission (SFC) had identified the Floki and TokenFi staking programs as suspicious investment products, primarily citing concerns over their high APY.

To mitigate regulatory uncertainties in Hong Kong, the Floki team has implemented several precautionary steps. They have prominently displayed warnings on the Floki and TokenFi staking websites, alerting users from Hong Kong that they are ineligible to participate in the staking programs. Additionally, practical measures have been taken to block users from Hong Kong from accessing the staking programs.

Furthermore, the team has temporarily halted their offline marketing campaign in Hong Kong, demonstrating their commitment to adhering to regulatory guidelines until any concerns raised by the SFC are resolved. These actions aim to prevent users from Hong Kong from engaging in the staking programs, ensuring compliance with local regulations and fostering transparency within the crypto community.

TokenFi and Floki staking programs APY

A significant point of contention highlighted by the SFC revolves around the exceptionally high APY offered by the Floki and TokenFi staking programs. However, the Floki team provides an insightful explanation regarding the sustainability of this high APY, shedding light on the underlying mechanisms of the staking programs.

Unlike traditional staking models that rely on minting new supplies or allocating a small percentage of tokens, Floki’s staking program rewards participants with $TOKEN, the utility token of the TokenFi platform. By eschewing traditional fundraising methods such as VC funding or presales, the majority of the TokenFi supply has been allocated to users who stake Floki, aligning with the project’s ethos as a community-driven cryptocurrency.

Moreover, the volatility of rewards, denominated in $TOKEN, is subject to market forces, allowing for fluctuations in APY based on TokenFi’s market capitalization. The decentralization of the staking programs ensures that users retain full control over their tokens, irrespective of the team’s involvement.

By expounding on the sustainability of the high APY and implementing measures to ensure compliance, the Floki Inu team reaffirms its commitment to regulatory adherence and community transparency.