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Far Eastern Air ends use of controversial cryptocurrency

2019/01/18 21:20:57

CNA file photo

Taipei, Jan. 18 (CNA) Taiwan-based Far Eastern Air Transport (FAT) has voluntarily stopped accepting Airline and Life Networking (ALLN) Tokens for air ticket purchases due to concerns that doing so could disrupt market order and lead to a race to the bottom, the Civil Aeronautics Administration (CAA) said Friday.

FAT confirmed to CNA it has stopped using the system but made no public statement.

The ALLN system, developed by FAT's mother company Huafu Enterprise Holdings Limited, offered passengers deeply-discounted tickets as low as 55 percent of the original price, according to FAT.

The system, which was introduced last August, has the potential to generate tickets below the regulated minimum price for domestic flight tickets, CAA said.

It could also create a vicious circle with airlines pushed into a race to the bottom for cheap tickets on domestic routes, CAA added.

The ALLN system, which has ambitions to become a leading blockchain-based system for real world consumption, has another problem, CAA said.

As a result of its marketing mechanism, FAT could inadvertently report inaccurate financial information, because fluctuations on the virtual currency market mean value stated in ALLN tokens could differ markedly when those tokens are converted into real money.

The CAA and Financial Supervisory Commission asked FAT last year to provide detailed information on transaction processes and accounting methods, but the company failed to do so.

FAT, which had about 2,000 air tickets purchased using ALLN tokens last year, said that although it is suspending the use of the system, the currency can still be used to purchase tour packages from URTraveller, a local travel agency and Huafu subsidiary.

(By Wang Shu-fen and Lee Hsin-Yin)