Chinese Fitness App to be Investigated Under Crypto Fraud
December 18, 2019 8:57 pm
One of cryptocurrency fitness apps from China has been placed under investigation for allegedly illegal fundraising practices and financial fraud. According to the report, the documents are ostensibly accessed by its affiliate publication, KrASIA.
The market regulator in Changsha, the capital of Hunan province, is investigating a fitness app that promised to reward users with cryptocurrency “candies” in exchange for being active.
The fitness app named “Qubu” promised that if its users walk over 4,000 steps a day for 45 days, they would earn 15 candies, which could then be traded in for cash or used to unlock app features promising higher rewards.
The candies were marketed as “wealth management instruments” with a lucrative offer of a 36.8% return over 60 days. The investment made users recruit further app users “downline” to earn extra income. Qubu claimed to have on-boarded 95 million registered users by December of this year.
The report notes this figure with suspicion, pointing to its implication that almost one in 10 mobile users across China would need to have been registered for this claim to be true. Trading on Qubu’s in-app exchange reportedly carried transaction processing fees of as high as 25–50%.
One of the investors said that he had spent 15,000 yuan ($2,150) via Qubu expecting a solid return, yet was now in limbo in light of the regulator’s actions. Qubu, formerly based in Changsha, has now relocated to the southwestern Chinese municipality of Chongqing.