Chinese authorities are said to be investigating a crypto fitness app called Qubu for alleged illegal fundraising practices. Nikkei Asian Review-affiliate KrASIA reported the news Wednesday.
December 18, 2019, | AtoZ Markets – It seems almost too good to be true: a mobile app that tracks how many steps you take each day and provides cash rewards depending on how far you walk. And so it may well turn out, as Chinese authorities are investigating if the crypto fitness app Qubu is a scam.
Public security officials in Central China’s Hunan province are investigating alleged illegal fundraising. They are also investigating financial fraud at the company behind the program, amid claims that it operates a Ponzi-like business model.
Qubu promised returns of up to 36.8% via its crypto “candies”
The app rewards users who walk more than 4,000 steps a day for 45 days with candy coins. This is a cryptocurrency that can be exchanged for real cash.
Qubu’s candies were reportedly marketed as an investment instrument with a return of up to 36.8% in over 60 days. The app claimed to have 95 million registered users (nearly one in 10 mobile users in China) and charged new users 1 yuan ($0.14) to sign up as a member, per the report.
Qubu’s app also reportedly had a facility where candies could be exchanged for cash and anyone could buy candies from other users using cash. Qubu said it had issued 1 billion candies.
One user, who spoke with KrASIA, spent 15,000 yuan ($2,150) in Qubu as an investment. He believed that blockchain-based assets would make him a good return. That turns out to have been a gross miscalculation, he told the news outlet.
Qubu had little to do with blockchain
The fitness app Qubu claims to operate on a blockchain platform. Nevertheless, industry observers told the news outlet that it had little to do with the technology.
Indeed, one of China’s most high-profile news programs, “Focus Report,” recently reported that there are 32,000 alleged blockchain companies in China. However, only less than 10 percent of them actually use the technology.
Further, data by China’s National Internet Emergency Center, revealed that there are over 755 tokens on the market. The data revealed that these ones are not backed by real initiatives or have hit zero after inception. The center also identified 102 coins that allegedly swindled consumers with Ponzi schemes.
Chinese companies seem to be rushing over blockchain ever since the country’s president Xi Jinping publicly endorsed the blockchain technology. Focus Report program, however, said that regulations need to be strengthened and “the public need to keep their eyes wide open for fraudulent activities.”
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