Alibaba ends relationship with US bitcoin-based retail startup
Just a day after US retail startup Lolli announced a partnership with Alibaba to offer shoppers bitcoin rewards when purchasing items on its marketplaces, the Chinese e-commerce giant has “deactivated the partnership without cause,” according to Lolli.
Why it matters: While Lolli is a US-based startup and the shoppers earning the bitcoin-based rewards are also located in the country, associating Alibaba one of China's most prominent tech companies with the cryptocurrency could have proved risky.
- Financial entities in China are prohibited from any dealings involving bitcoin and other cryptocurrency, and fintech giant Ant Financial is an Alibaba affiliate.
Detail: Prior to the statement from Lolli about the termination of the partnership, an Alibaba spokesperson told TechNode that “it does not have any partnership” with the firm and that a previous TechNode story about the partnership “is not true.”
- Alibaba Group later characterized its relationship with Lolli as an “affiliate marketing program” brokered by a subcontractor of one of its contractors without the company's knowledge.
- Alibaba also said its “contractor is terminating the relationship with the subcontractor who was working with Lolli,” and that Lolli “never had the right to claim a partnership with Alibaba.com or imply one with Alibaba Group, the parent of Alibaba.com.”
- Lolli called the deactivation a “rare and unforeseen occurrence,” but left open the possibility of working with Alibaba in the future. Lolli users can still get bitcoin back when shopping on AliExpress and Alibaba Cloud.
Context: Originally announced on Singles Day, the partnership would have allowed for US-based shoppers to earn up to 5% of their purchases on Alibaba back in bitcoin, with items being shipped from China to the US.