Alibaba Partners With Lolli to Reward Customers in Bitcoin While Global Regulators Tighten Their Grip on Crypto

The Ruling

In a striking juxtaposition of regulatory hostility and corporate adoption, November 23, 2019 found the cryptocurrency world navigating two very different realities. In China, the People’s Bank of China had just launched its most aggressive crackdown on cryptocurrency businesses in over two years, with the Shanghai and Shenzhen branches coordinating statements that declared all forms of token offerings illegal. Meanwhile, Chinese e-commerce giant Alibaba announced a partnership with Bitcoin rewards platform Lolli, enabling customers to earn Bitcoin cashback on purchases. The contradiction was not lost on market observers: one arm of China’s business ecosystem was embracing Bitcoin while the government was working overtime to suppress it.

The Alibaba-Lolli partnership represented a significant milestone for Bitcoin adoption in mainstream commerce. Lolli, a browser extension and shopping rewards platform, had been building partnerships with major retailers throughout 2019, but securing Alibaba — the world’s largest e-commerce company by revenue — marked its highest-profile collaboration to date. Users who shopped through Lolli’s platform could earn a percentage of their purchase back in Bitcoin, creating a frictionless on-ramp to cryptocurrency ownership for millions of consumers who might never have considered buying digital assets directly.

International Precedents

The Alibaba partnership emerged against a backdrop of rapidly evolving global regulatory frameworks. In the United States, the Securities and Exchange Commission had just days earlier given Bitwise Asset Management another opportunity to argue for its proposed Bitcoin exchange-traded fund. The SEC had been methodically rejecting Bitcoin ETF applications since the Winklevoss proposal in 2017, citing concerns about market manipulation, insufficient surveillance, and the lack of regulated custodial infrastructure. Bitwise’s renewed opportunity suggested that the regulatory tide was not uniformly hostile — there was genuine institutional interest in creating regulated crypto investment vehicles, even if approval remained elusive.

Across the Atlantic, the regulatory picture was similarly complex. The European Union was continuing to develop its anti-money laundering directives, with the fifth iteration (AMLD5) set to take effect in January 2020, bringing cryptocurrency exchanges and wallet providers under formal regulatory oversight for the first time. In the United Kingdom, the Financial Conduct Authority was working with cryptocurrency startups through a regulatory sandbox initiative, attempting to balance consumer protection with innovation. These divergent approaches — prohibition in China, cautious integration in Europe, and a case-by-case evaluation in the United States — created a fragmented global landscape that made compliance a nightmare for any crypto business operating across borders.

Enforcement Reality

The gap between regulatory pronouncements and enforcement reality remained substantial. China’s 2017 ban on cryptocurrency exchanges had driven trading activity offshore, but Chinese citizens continued to access platforms through VPNs and peer-to-peer networks. The Shanghai PBOC’s identification of 39 exchanges circumventing the ban acknowledged what industry participants already knew: prohibition had not eliminated demand, it had merely pushed it into less transparent channels. The parallel statement from Shenzhen suggested that enforcement would intensify, but history offered limited evidence that such campaigns produced lasting results.

In the United States, enforcement took a different form. The SEC had been pursuing a strategy of regulation by enforcement, bringing actions against initial coin offerings and token projects that it deemed to be unregistered securities. The Commodity Futures Trading Commission had taken a more accommodative stance, approving Bakkt’s physically-settled Bitcoin futures platform, which had launched in September 2019. By late November, Bakkt was experiencing record trading volumes even as Bitcoin’s price tumbled to six-month lows near $6,785. The divergence between falling prices and rising institutional infrastructure suggested that the market was undergoing a structural transformation even as retail sentiment soured.

Market Shockwaves

The combined weight of China’s crackdown and ongoing regulatory uncertainty worldwide took a measurable toll on cryptocurrency markets through late November 2019. Bitcoin’s price had fallen from approximately $10,000 in mid-September to around $7,397 by November 23, a decline of more than 25 percent in two months. Ethereum was trading at $153, down significantly from its year-to-date highs, while XRP had slipped to $0.236. The total cryptocurrency market capitalization had contracted substantially from its 2019 peak.

Yet beneath the surface of falling prices, several positive indicators emerged. Grayscale Investments was pursuing SEC reporting company status for its Bitcoin Trust (GBTC), a move that would make the investment vehicle accessible to a broader range of accredited investors. Bakkt’s growing futures volumes signaled genuine institutional engagement with Bitcoin derivatives. And Alibaba’s partnership with Lolli demonstrated that mainstream corporations were not deterred by regulatory uncertainty from exploring Bitcoin-based consumer products. These developments suggested that the market was simultaneously experiencing a price correction and a maturation process, with regulated infrastructure expanding even as speculative enthusiasm waned.

Closing Thoughts

The events of late November 2019 illustrated a fundamental tension in the cryptocurrency ecosystem that persists to this day: the technology is global, but regulation is local. China can ban cryptocurrency trading within its borders, but it cannot prevent Alibaba from partnering with a U.S.-based Bitcoin rewards company. The SEC can reject Bitcoin ETF applications for years, but it cannot stop physically-settled futures from launching on regulated exchanges. And while governments debate classification frameworks and enforcement strategies, consumer-facing applications continue to build bridges between traditional commerce and digital assets. The Alibaba-Lolli partnership, in particular, represented a pragmatic approach to Bitcoin adoption that sidestepped the regulatory debates entirely — by rewarding purchases in Bitcoin rather than selling it directly, the model operates in a gray area that most regulators have not yet addressed. As the cryptocurrency industry continues to navigate an increasingly complex regulatory maze, these creative workarounds may prove more consequential than any single legislative decision. Bitcoin at $7,397 was a market digesting bad news from China, but the infrastructure being built around it suggested that the long-term trajectory remained firmly upward.

Disclaimer: This article is for informational purposes only and does not constitute financial or legal advice. The regulatory landscape discussed herein reflects conditions as of November 2019 and may have changed significantly since then. Always consult qualified professionals before making investment decisions.