Qubu app, a blockchain-based fitness app that gives users free tokens for walking out daily, is currently under investigations by the Chinese authorities for conducting illegal fundraising and financial fraud.
Reports from Nikkei Asian Review revealed today that since the firm’s launch, Qubu had amassed over 95 million users on the app via several gimmicks, which had prompted regulators from China’s Hunan province to wade into the firm’s activities.
According to the report, one of the antics used by Qubu to lure users to its platform is by giving them a task to walk 4,000 steps a day for 45 days, in order to earn a reward of “15 candles.”
The Qubu candles can then be exchanged for the firm’s native token dubbed GHT on the platform, and the users could receive up to 36.8% returns.
Aside from earning Qubu’s candles via its task, the firm’s token can be bought using cash, with Qubu stating that it has issued about 1 billion candles to users since its inception.
Another tactic Qubu used to lure more members is by adopting a pyramid scheme where existing users are requested to refer new members for an undisclosed incentive.
As per the report, new users are prompted to provide details of their names, ID card number, and Alipay account information, while the firm charges new users about 1 yuan ($0.14) to confirm their registration details.
Notably, for every transaction conducted on the app, Qubu takes about 25-50% of the transaction value as a processing charge.
Qubu’s claim that it runs a blockchain-based platform has, however, been disputed by several observers as they believe the firm used that technique to increase its users because the Chinese government is currently promoting the adoption of blockchain.
In October, President Xi Jinping was reported to be discussing the current and future landscape of blockchain technology in the country.
Earlier this month, South China’s Hainan Province reportedly said it will provide a special fund of 1 billion yuan ( $142 million) to boost the blockchain industry in the region.
Source: Coinfo mania