The meme cryptocurrency project Floki has taken regulatory steps towards the Hong Kong Securities and Futures Commission (SFC).
This comes after the SFC allegedly tagged the token staking program as a 'suspicious investment product'.
Additionally, the team has stopped users in the region from accessing its Floki and TokenFi staking programs until further notice.
Following the allegation, the team released a statement via a Medium post.
"We've taken steps to mitigate concerns in jurisdictions where the regulatory framework does not specifically cover or cater for the staking programs.". "As indicated by the statement of the SFC, it appears that the high APY of the Floki and TokenFi staking programs is their key concern," the team said.
The team went ahead to deploy means of addressing the regulatory concerns by preventing Hong Kong users from their staking programs, ensuring that no Hong Kong users have joined the program to date, the team has sent out warning notices and stopped their offline marketing campaign in the region.
In the Medium post, the team also clarified that the impressive annualized percentage yield (APY) of the token's staking program is maintained through a distinctive reward structure utilizing $TOKEN derived from the prosperous sister project TokenFi.
This is coupled with a market-responsive APY, a decentralized and community-centric allocation strategy, and the absence of funding from venture capitalists (VCs) or presales.
The Hong Kong SFC has previously warned investors about the dangers of investing in high-risk and unregulated virtual asset platforms.
"Whilst some [Virtual Assets] Arrangements are commonly labeled or marketed as "deposits" or "savings" products, they are not regulated and are not the same as bank deposits. Investors are not afforded any form of protection," the SFC said in the post released in December 2022.
At the time of writing, FLOKI is priced at $0.00002938, accompanied by a 24-hour trading volume of $10,325,692.03.
Over the past 24 hours, its value has increased by 2.06%, and over the last 7 days, there has been a 5.24% rise. Its market capitalization is $292,191,040, considering its circulating supply of 9.9 trillion.
Despite a 5.40% price surge in the past week, the token is showing relative underperformance compared to the global cryptocurrency market, which has experienced a 9.00% increase.
Additionally, it lags behind similar cryptocurrencies within the Ethereum Ecosystem, where the average gain is 12.70%.
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