- Telecommunications Giant Vodafone Leaves the Libra Association
- Group of Central Banks Assesses Developing Central Bank Digital Currencies
- South Korea Might Impose 20 Percent Tax on Cryptocurrency Profits
- Report: Terrorists Increasingly Use Crypto to Raise Funds Anonymously
- Canadian Securities Administrators Subject Crypto Exchanges to Securities Laws
The latest on the crypto scam list is a pyramid scheme organized by a Chinese fitness app called Qubu. The app promises its users some amount of its native tokens ‘Candy’ for completing daily exercises. All the user has to do is to walk 4,000 steps a day for 45 days and he/she is qualified for 15 Candy tokens. Sounds too good to be true, yes?
Organized like an innovative blockchain idea, Qubu made its users believe that each task they complete helps in mining its native token Candy, which they get to claim. As the users advance through the different tasks, they could supposedly generate more Candy tokens as the app employs more of the device’s CPU. The Candies purportedly carry the attractive potential of very high returns, up to nearly 37%.
To further promote the pyramid scheme, Qubu urged users to recruit other users in the form of a downline, a known pyramid function. Also, users get some Candies for referring someone to the app. On paper, it might seem like a nice side income in which anyone could partake. As a matter of fact, one of the team leaders was quoted saying she can make up to 180,000 yuan (almost $26,000) per year just from investing in the blockchain platform.
Like other crypto firms, Qubu operated a trading platform where users could buy bundles of its digital currency GHT from other users via real cash, collecting a whopping 25-50% on each transaction as a processing fee.
No Actual Blockchain Technology Involved
Well, it turns out that there was never really any blockchain and that the firm is basically a pyramid scheme, robbing ‘Peter’ to pay ‘Paul.’ Qubu only used the trending tech as a “buzzword” to catch people’s attention.
Thankfully, Chinese regulators caught wind of the scam and Qubu is now placed under investigation for financial fraud and illegal fundraising practices.
Commenting on the pyramid scheme, the Chinese specialist in exposing pyramid schemes across the country Du Xiang noted the following:
“[T]he danger of Qubu and similar online scams was that they tended to have low investment entry points and a large target population. Plus, they’ve created an illusion that it’s cutting-edge and following the social trend of [adopting blockchain technology].”
It is quite known that crypto scams are on the rise in recent years as many authoritative sources indicated. The global crypto ecosystem is littered with a boatload of con artists, pretending to employ new financial technology in one way or the other. It seems like there is a new scam idea erupting in the space every other day.