STEPN responds to the controversy: why we need to withdraw mainland users

Written by: Rhythm BlockBeats & STEPN co-founder Yawn

In the early hours of May 27, the user policy of the leading Web3 application STEPN experienced a "shock." The team issued an announcement stating that they would conduct a "Notice on the Investigation of Accounts in Mainland China." According to the announcement, in order to proactively respond to relevant regulatory policies, STEPN will investigate accounts in Mainland China. If users from Mainland China are found, STEPN will stop providing GPS and IP location services for their accounts at 24:00 on July 15, 2022 (UTC+8) in accordance with the terms of use.

The news quickly escalated. After all, STEPN is highly representative in the Web3 concept and can even be considered an industry leader. The current wave of Web3 entrepreneurship is closely linked to STEPN's success, and any mention of the Web3 concept in the Chinese internet cannot avoid the name STEPN. However, the announcement on May 27 essentially indicates that after July 15, it will theoretically be impossible for users in Mainland China to participate in STEPN's Move to Earn.

Amidst the panic in the Chinese community, rumors spread, exacerbating the community's unease with information such as "the team was taken away" and "GPS data is being regulated." In response, STEPN co-founder Yawn addressed the most pressing concerns of the community.

Rhythm: Let's get straight to the point. There are widespread rumors online that the STEPN domestic team has been taken away for investigation. How does the official respond?

Yawn: I have seen these rumors written seriously, but unfortunately, we do not have a team in Mainland China, and the idea of being taken away for investigation is absurd. We will have a major update coming next week, and I believe these rumors will be debunked.

We are a Web3 startup with developers from all over the world, and job positions can be applied for on Discord. In the early days, we operated in a distributed manner; the founding team is from Australia, our CMO Ms. Shiti is based in London, and our customer service center is in the Philippines and other Southeast Asian countries. Our R&D team, consisting of nearly a hundred people, is spread across more than a dozen countries globally, and as we grow, we are establishing two large R&D centers in the United States and Australia.

Rhythm: The announcement states that the investigation of users in Mainland China is to comply with regulations. What kind of regulations are we talking about? Is it related to the rumored GPS regulations? As we know, Didi faced similar regulations before, and recently Nike's running app NRC also suspended services for Chinese users. Is STEPN facing the same issues?

Yawn: As our team grows and our business expands, we deeply understand the importance of long-term development. Due to the need for anti-cheating measures, we must use GPS location as a verification method, and GPS regulation indeed poses the same issues for large companies like Didi. Nike is even unable to operate in Mainland China.

As entrepreneurs with a Chinese background, we fully understand the relevant policies in Mainland China. We consistently support and comply with the laws and regulations of various countries. If one day similar policies are introduced in Zimbabwe, Kenya, or South Korea, we will also comply with local laws. We believe that as Web3 gradually enters the mainstream, regulatory policies will truly catch up with the industry's development and provide us with corresponding guidance.

Rhythm: Yesterday, Jerry stated that domestic users account for 5% of STEPN's total user base. Is this number accurate? Some in the community believe that domestic users account for 30% of STEPN's user base.

Yawn: This number is accurate; we are referring to Mainland China (excluding Hong Kong, Macau, and Taiwan). I need to clarify the community's views on this matter: the number of Chinese users is indeed more than 5%, as users from Malaysia, Singapore, and other places also speak Chinese and participate in Chinese community activities. Therefore, many users may become confused.

Chinese users are an important part of Web3 globally, including many executives in companies like Binance and FTX. Our Chinese user base is certainly more than 5%, but what I want to emphasize is that the number of Chinese users in Mainland China is indeed only 5%.

Web3 knows no borders, but policies do. The low proportion of users from Mainland China is mainly due to local regulations; we have never provided download services for the Mainland region, and the barriers to entry are high. Apple users need to obtain a non-Mainland Apple ID, while Android users must install Google services to access Google Play. However, this does not stop the enthusiasm of many users; approximately 5% of users still come from Mainland China, using various methods to ultimately download our product. We also look forward to the day when we can provide high-quality products and services to users in Mainland China.

Rhythm: Regardless of the method used, will users from Mainland China theoretically be completely unable to participate in STEPN's Move to Earn after July 15? But can they still participate in other aspects of STEPN? Can we understand it this way?

Yawn: Given that STEPN must use GPS as a method to verify users, after July 15, users will be completely unable to use GPS and thus unable to use STEPN normally. The IP ban will prevent users from accessing STEPN. We need to point out that STEPN has adhered to relevant rules since its inception and has not engaged in any business or provided download channels in Mainland China. Therefore, during our self-examination process, we have raised higher compliance requirements and will stop providing services to accounts using GPS and IP from Mainland China before July 15.

Rhythm: Some believe that STEPN's development has greatly relied on the Chinese community, and the investigation will cause significant harm to Chinese users. What would you like to say to users in the Chinese community?

Yawn: We still believe that Web3 has a better future. We fully understand and support the relevant policies in Mainland China. We will continue to expand into markets in countries that are friendly to Web3 and gradually build our Web3 infrastructure, allowing more non-Web3 users to participate in our ecosystem and become an important part of the Web3 world. We hope to provide more Chinese Web3 entrepreneurs with experience and skills for entrepreneurship and business expansion.

This is STEPN's response to the recent concerns of the community. It seems that STEPN's departure from the Mainland China market has been confirmed, which is unfortunate, but we believe that the team's decisions must have been made after careful consideration. As a representative application of Web3, STEPN has brought us surprises and new imaginative possibilities, filling users and entrepreneurs with hope for the future of Web3.

However, we still hope that STEPN can return in some way, allowing players in Mainland China to once again enjoy the complete experience that STEPN offers.