STEPN, a move-to-earn platform that blocks geolocation services in China for mainland users from the middle of summer onwards, will be blocking this game. In the wake of the announcement, the token’s price dropped significantly, losing 40% of its value within hours.

According to the announcement by the game, it will stop offering GPS services for China-based IP addresses. The company stated, in addition to stating that the changes will be implemented locally, local users must make arrangements for virtual assets.

The concept of STEPN is based on GPS, which tracks the steps and movements of users who’ve bought virtual NFT sneakers, and converts them into in-game utility tokens.

STEPN, which was launched in 2021, generated $20M of profit for the first quarter of 2022. The game accounts for over 580,000 global players at the time of writing, though it’s not clear how many users of the play-to-earn game are based in China.

The prices drop

Following the announcement, the price of the project’s in-game GMT token lost over 40% of its value, dropping from $1.397 to lows of $0.8349 early on Friday, according to CoinMarketCap. GMT trades at approximately $0.943 at time of writing. However, it is far from its former high.

The floor price and trading volumes of STEPN’s NFT sneakers on NFT marketplaces have dropped accordingly in the past 24 hours. Average floor prices of NFT sneakers based on Solana have declined 40% to 7.6 SOL from 12. Trading volume dropped more than 53% from 4.72K to 2.22K on Magic Eden NFT Marketplace.

Are There Any Regulatory Concerns?

STEPN still has not explained why the team made such a decision but they have hinted at compliance with local regulatory policy in their Twitter thread (NYSE.)

“STEPN has always attached great importance to compliance obligations and always strictly abides by the relevant requirements of local regulatory agencies. We also remind users to beware of scams,” the post said.

Chinese authorities are known for their fear of foreign surveillance. Last year the country cracked down on the use of Tesla (NASDAQ:) cars by state government officials due to the maker’s facial recognition cameras. China’s government stated they could be used to spy on the state and secretly collect information.

The country’s general prosecutor increased levels of scrutiny towards the metaverse and NFTs earlier this year. China officials warned against severe penalties for financial crimes such as money laundering or illegal fundraising that are done through NFTs, the metaverse and NFTs.

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