It plummeted 40% at one point!

Seeing a flash crash in the currency circle, netizens are worried: "The next Luna?"... Sequoia India and others have invested, but they are suspected of having Pond's characteristics

  After the value of the cryptocurrency Luna is almost zero, the cryptocurrency market has once again attracted attention, this time it is STEPN, a popular "running shoe" project in the currency circle.

  On May 27, STEPN suddenly announced that it would withdraw mainland users, causing the prices of the project tokens GMT and GST to plummet, with a drop of nearly 40% at one point.

However, as market sentiment has eased, the prices of the two tokens have recovered as of press time.

  Stop providing GPS and IP location services before July 15

  In the early morning of May 27th, Beijing time, STEPN released the "Announcement on Clearing and Removing Accounts in Mainland China" on its official social media, saying that it would conduct an inventory of software users. We will stop providing GPS and IP location services at 24:00 on July 15, 2022 (UTC+8).

  STEPN stated in the announcement that if the user expects to log in and use the account at the GPS or IP location in mainland China for a long time, it encourages the user to make his own decision to deal with the assets in the application.

  As for the reason for removing users from mainland China, STEPN explained in the announcement that it was "to actively respond to relevant regulatory policies".

  On September 24 last year, the People's Bank of China issued the "Notice on Further Preventing and Disposing of Hype Risks in Virtual Currency Transactions", reiterating that virtual currency-related business activities are illegal financial activities.

Among them, the provision of services by overseas virtual currency exchanges to domestic residents in my country through the Internet is also an illegal financial activity. For domestic staff of relevant overseas virtual currency exchanges, and those who know or should know that they are engaged in virtual currency-related business, still provide marketing for them Legal persons, unincorporated organizations and natural persons providing services such as publicity, payment and settlement, and technical support shall be held accountable in accordance with the law.

  After the "Notice" was released, some cryptocurrency trading platforms successively announced the withdrawal of users from mainland China.

Among them, Binance C2C delisted the CNY trading area at 24:00 on December 31 last year, and at the same time, the platform users will be checked. If the platform finds users in mainland China, the corresponding account will be switched to the "withdrawal only" mode. Can withdraw, cancel orders, redeem, and close positions.

  It is unclear whether STEPN's removal of mainland Chinese users is based on this regulatory policy.

  STEPN revealed in the announcement that it has neither engaged in any business in mainland China nor provided download channels since its establishment. "STEPN has always attached great importance to compliance obligations and has always strictly followed the relevant requirements of local regulatory agencies."

  The STEPN token plummeted nearly 40% at one point

  The announcement of the withdrawal of users in mainland China triggered a plunge in the STEPN project token GMT.

  In fact, before the announcement of the withdrawal of users in mainland China was issued, GMT began to dive from noon on May 26, and the price fell all the way from around $1.32 to the lowest of $0.80423, the largest drop of nearly 40%.

However, as sentiment eased, GMT prices also recovered, last at around $1.04 at press time.

  At the same time, the game token GST in the STEPN project also plummeted, with a drop of more than 20%.

  "The second Luna is here?" Some people in the currency circle commented on social media.

  Valuation exceeded $1 billion

  Suspected of having Ponzi characteristics

  STEPN is one of the hottest currency circle projects in early 2022, featuring the concept of "Move to Earn".

To put it simply, STEPN is a game APP based on blockchain technology that supports users to own NFTs in the form of sneakers and earn tokens by walking or running outdoors in the real world for income.

To participate in the game, players need to own the NFT sneakers launched by STEPN before participating in the game.

Therefore, the "running shoe" NFT has also become one of the symbols of the project.

  STEPN mainly uses two currencies, the game token GST and the governance token GMT.

Among them, GST is mainly used to upgrade the game experience, such as making, repairing and upgrading running shoes, or upgrading gems, unlocking sockets, etc.; GMT is mainly used for trading and in-game mortgages.

  The game of earning tokens while running has made STEPN users grow rapidly. In just one month from March to April this year, the daily active users increased from 30,000 to 400,000, the registered users exceeded 1 million, and the valuation exceeded 1 billion US dollars.

  Previously, STEPN completed a $5 million seed round led by Sequoia Capital India and Folius Ventures in January this year, and received a strategic investment from Binance Labs in April.

  However, questions surrounding whether STEPN is a Ponzi scheme have never ceased.

Some analysts believe that STEPN adopts a dual-token economic model, in which the total amount of GST is unlimited, and the total amount of GMT is 6 billion. This kind of token economy that attracts users purely by economic model is also a kind of "Ponzi scheme".