Key takeaways:
- Hong Kong’s Securities and Futures Commission scrutinizes Floki Inu staking schemes for high returns and lack of transparency.
- FLOKI schemes promise annualized returns between 30% and over 100%
The Securities and Futures Commission (SFC) of Hong Kong has issued a warning to the public regarding suspicious investment products named “Floki Staking Program” and “TokenFi Staking Program”.
These programs, which involve cryptocurrency staking services, claim to offer extraordinarily high annualized return targets ranging from 30% to over 100%. However, the SFC has highlighted significant concerns regarding the legitimacy of these programs, citing unrealistic return promises and lack of authorization in Hong Kong.
As the primary financial regulatory authority in Hong Kong, the SFC has raised red flags about the Floki Inu and TokenFi staking programs, which have been enticing investors with the promise of high returns.
The lack of authorization for these programs in Hong Kong adds to the regulatory body’s apprehensions. The SFC has expressed doubts about the strategies employed by these staking programs to achieve such substantial returns, emphasizing the lack of transparency as a cause for concern regarding the viability and longevity of these initiatives.
In the volatile domain of virtual assets, the SFC’s advisory urges investors to conduct thorough research and exercise caution when considering high-yield investment opportunities. Cryptocurrency staking, a method gaining popularity for earning rewards, has come under scrutiny by the SFC.
The commission warns that such schemes may constitute unauthorized collective investment schemes and carry significant risks. Under the Securities and Futures Ordinance (SFO), investors participating in such schemes have limited or no protection and face the risk of losing their entire investment.
The SFC notes that information regarding these suspicious products and the products themselves are accessible to the Hong Kong public via the internet. Consequently, the SFC has listed the two products and their related information on the SFC’s Suspicious Investment Products Alert List as of January 26, 2024.
The commission has emphasized its commitment to taking appropriate actions in case of any legal breaches.
This announcement serves as a timely reminder for investors to approach cryptocurrencies and investments with skepticism and due diligence.
In response to the evolving challenges in virtual asset trading, the SFC has collaborated with the Hong Kong Police Force (HKPF) to establish a dedicated working group focused on Virtual Asset Trading Platforms (VATPs).
This joint effort aims to enhance vigilance and enforcement in the sector, ultimately protecting investors from fraudulent activities and other financial risks.
Recently, the SFC of Hong Kong issued another warning regarding possible fraudulent activities involving BitCuped and the Hong Kong Digital Research Institute. This underscores the ongoing efforts of regulatory authorities to safeguard investors and maintain integrity within the cryptocurrency landscape.
