Securities.io is committed to rigorous editorial standards. We may receive compensation when you click on links to products we review. Please view our affiliate disclosure. Trading involves risk which may result in the loss of capital.
Table Of Contents
A popular NFT project called STEPN, which allows users to purchase its digital sneakers NFTs and then earn crypto by simply walking, announced that it will soon stop providing services to China-based users. The so-called move-to-earn game noted that this includes all mainland China users, and it is necessary in order to comply with the local regulations.
STEPN forced to withdraw services from China
The NFT sector has been growing rapidly for a year and a half now, and while the early NFT projects focused on artwork and collectibles, many more complex ones have emerged over the last 17 months. One of them is STEPN, a project that offers users to purchase sneakers NFTs, and earn digital currencies by walking around with NFTs in their possession. By walking or running, players would earn STEPN tokens, which can then be converted into other cryptos, or fiat currencies.
While the NFTs were available to users around the world, and the project quickly rose through the ranks due to extreme popularity, it appears that certain regulations will force the project to abandon users in some areas, with mainland China being the first.
The project noted that the country’s regulatory policies were responsible for this course of action, and the project will start checking and clearing out mainland China-based users. On July 15th, the project will stop providing GPS and IP geolocation services to the users, which gives the NFT owners a little more than a month and a half to make arrangements regarding their assets.
This, however, might be more difficult than it sounds, as China’s central bank, the People’s Bank of China (PBoC) reminded foreign crypto exchanges that offering services to Chinese users will be treated as engaging in illegal financial activities.
The impact of the announcement
STEPN saw a huge amount of popularity quickly upon release, reaching more than half a million users. Dune Analytics claims that STEPN currently has 580,000 users, around 39,000 of which were active in the last 24 hours. However, the project is currently experiencing a difficult time, as the new announcement resulted in a 38% price crash.
It remains unclear how many of the project’s users are based in China, but the announcement was also followed by the game emerging as the top-trending search term on Weibo, China’s local social media platform.
Interestingly enough, the project was co-founded by China’s own entrepreneurs, Yhwh Rong and Jerry Huang, who chose Australia as the country in which their project will be headquartered. At the moment, the largest STEPN market seem to be Japan and the US, and it is also known that the project currently employs 60 people.
STEPN seemingly expected trouble with China, as it claims that it never offered any channels for download in the mainland part of the country, nor did it operate any business there. The company said as much in its own statement. However, one of the project’s representatives, known only as Jason, noted that the company does have a technical team in China. The team got targeted by the regulations and became implicated, as the announcement noted.
Jason further added that the announcement is very urgent, and that the ecosystem “will not sustain” if the project chooses to ignore the regulations. While this is very difficult for the project to turn its back on Chinese users, STEPN has no choice in the matter, and the move simply must be done.
To learn more visit our Investing in STEPN guide.
Ali is a freelance writer covering the cryptocurrency markets and the blockchain industry. He has 8 years of experience writing about cryptocurrencies, technology, and trading. His work can be found in various high-profile investment sites including CCN, Capital.com, Bitcoinist, and NewsBTC.