A new potential crypto scam could turn out to be a major threat for the users of the Chinese fitness app Qubu as the authorities of the Hunan province started investigating the app concerning illegal fundraising and financial crypto fraud. In today’s crypto news, we take a closer look at what exactly is going on.
There are concerns over marketing as an investment instrument that has led to the withdrawal of Qubu from the app stores. Its systems have also drawn criticism over the potential crypto scam and they are even considering a possible Ponzi scheme. Nonetheless, Xi’s endorsement of blockchain technology is still underscoring the importance of China for the entire industry. The reports that Chinese authorities are probing the operations of Qubu should ease up on the concerns of yet another possible fraud in the crypto space. While the idea of exchanging steps for virtual ‘’candies’’ is harmless in effect, it was a lure of earning a real money that made some raise their eyebrows.
The users could trade-in the ‘’candies’’ to unlock other tasks that bring higher rewards as well as exchange it for the yuan. The app even featured an exchange where the users could purchase ‘’candies’’ for cash. As per the new news outlet CNR, Qubu was the most downloaded app at the start of the year in the life category. The users could earn passive income just from walking so it’s surprising that it quickly caught on. The user base reached 96 million according to Qubu.
Qubu operates as a five-tier pyramid model that gives rewards to established users who convince others to sign up. By doing this, earning more ‘’candies’’ is possible as well as moving up in the ranks for higher commission percentages. According to Nikkei reviews, there is a video that promotes the app where a user claims to be earning $25.7K a year by buying ‘’candies’’ and recruiting new users. what is even more fascinating, Qubu isn’t even a genuine crypto platform. According to the Kong Deyum chief researcher at OKEX, there’s no underlying ledger that supports the transactions:
“there was no real blockchain technology involved and the money in the system circulated between users themselves. Once there were not enough new users coming in, the capital chain would be cut off.”
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