(Yicai Global) Nov. 24 -- Kuaishou Technology, which is gearing up for a USD5 billion initial public offering on the Hong Kong stock exchange next year, is facing a big slash in earnings as Chinese regulators crack down on online ‘tipping,’ which is the world’s highest-grossing live-streaming platform’s biggest source of revenue.

From now on, all those watching online live shows or e-commerce livestreaming, must register using their real identification, as opposed to a pseudonym, in order to purchase virtual gifts for livestreaming hosts or other internet celebrities, according to new guidelines laid out by the National Radio and Television Administration yesterday. Underage users are also to be banned from any kind of tipping, it added.

Platforms must also place a daily and monthly cap on the amount of rewards given per user and to remind consumers of how much they have spent once their spending reaches half of this upper limit, the NRTA said. Consumers need to confirm receipt of this notification by SMS or other means before they can continue spending. Should they exceed the limit, the websites must shut down the reward function on these users’ accounts.

The move will greatly dampen the earning potential of the Beijing-based internet giant. The firm raked in CNY17.3 billion (USD2.6 billion) in the first six months through livestreaming, 68.5 percent of all revenue, according to the company’s IPO prospectus. Other revenue streams are online advertising and e-commerce.

Livestreaming sites are responsible for monitoring their platforms, the NRTA said, as the regulator continued to tighten up their act. Any hosts who are found to be encouraging users to spend irrationally, luring minors to spread lewd content, organizing publicity stunts or hiring ‘click-farmers’ to drive up ratings should be reported to the authorities.

Vendors too must register with their real names or be barred from the sites, it added. The platforms should delay the transfer of funds to hosts’ accounts in case they are found to have broken the law, in which case the money should be refunded to the user, it added.

Editor: Kim Taylor