The first move-to-earn mobile non-fungible token (NFT) game, StepN, is set to block China mainland users from using its platform by disabling Global Positioning System (GPS) and Internet Protocol (IP) location services serving them. Starting July 15, the game that rewards users for walking or running say the ban on all mainland Chinese users due to regulatory policies would take effect.

In its announcement, StepN states that its decision to “conduct an inventory of software users” to identify those from mainland China and stop providing GPS to their accounts or banning their IPs from July 15, 2022 (UTC+8) is in response to relevant regulatory policies.

It states: “StepN has not engaged in any business in mainland China since its establishment and has not provided download channels. StepN has always attached great importance to compliance obligations and always strictly abides by the relevant requirements of local regulatory agencies.”

The presence of the StepN technical team in China – as their operational base – makes the ban even more unavoidable for the blowback the non-compliance with local regulatory policies could have on their project, one of the platform’s representatives said in a Twitter Space session.

1/ 關於清查中國大陸帳戶的公告

尊敬的STEPN用戶：
為積極主動響應相關監管政策，STEPN將對軟體用戶進行清查，若發現中國大陸地區用戶，則STEPN將依據使用條款對其賬戶於2022年7月15日（UTC+8）24:00 停止提供GPS及IP位置服務。

— STEPN | Public Beta Phase IV (@Stepnofficial) May 26, 2022

Developed by FindSatoshi Lab Ltd., the StepN app came fourth at last year’s Solana Ignition hackathon. Since launching as an invite-only game, its popularity has soared especially in the aftermath of the COVID-19 pandemic in which people started perceiving their personal health and have been doing more exercises.

The app has grown to have a community of over 2.3 million monthly active users and over half a million daily active users, according to the company. In addition to the move-to-earn movement, the app also incentivizes users for participating in exercises and for working out to stay healthy.

Speaking to CoinDesk, Yawn Rong, StepN co-founder, reiterates that the reason for the proposed ban is for their company to be compliant with regulations. “We do constant in-house scrutinies of our legal compliance and we figure that it’d be a potential risk and we voluntarily withdraw from Mainland China,” he said in a video session.

“This will not affect places like Hong Kong, Macao, Taiwan, for example. It would be strictly to mainland China and because of the nature of the app, we are listed on the Apple and Google (play stores) in any other part of the world but it is not on mainland China. People use APK basically to download and use Hong Kong ID to register. We see that we stand to see people actually using them, sort of, without (our) consent. So we have to be more careful with the local regulators for compliance. We have to ban GPS and IPs to basically remove the risk.”

Meanwhile, as there are reports that the proposed ban has had a toll on the platform’s native asset, GMT, falling about 34% in 24 hours, StepN advised users that would be affected by its planned move to decide on how they will handle their in-app assets. The company had also reportedly revised its white paper without notifying its community in May.

Regardless of the development, Rong maintains that the project is continuing with their mission to get more people active, bring more Web2 users to Web3 – with 30% of their users not ever have used cryptocurrencies before – and donate to curb climate change impact every month.