Qubu, the disgraced fitness app which is currently under investigation for illegal fundraising and financial fraud in China, has started operating in Malaysia with a brick-and-mortar store in the country’s capital Kuala Lumpur.
The self-proclaimed blockchain-based fitness app launched an English version Android app earlier this year and Qubu promoters in Malaysia have so far set up several accounts on popular social media and short-video platforms.
Pictures, video clips and promotional fliers seen by KrASIA reporters show that Qubu promoters use similar sales pitches to lure in new users – easy earning by daily walks. “The good news is that you can now earn while keeping yourself healthy, increase your income simply by just completing 4000 steps a day to get ‘candy’,” read one Qubu promotional flier KrASIA obtained in its brick-and-mortar store at a shopping mall in central Kuala Lumpur.
“Blockchain + Fun Run,” the bold black characters on the top part of its flier resembles the sales massage Qubu uses in China—its claim of using blockchain technology has been debunked by many Chinese blockchain industry insiders.
The app rewards new users 15 candies for walking 4,000 steps every day for 45 days. These Qubu candies are a type of in-app virtual currency. Users could trade-in their candies for more complex tasks which in turn would yield more candies, or exchange their candies for real-world cash (where Qubu would take a 25–50% transaction processing charge).
Qubu has adopted Malaysian local currency Ringgit as one of its trading currency and advertised the possibility of trading candies for gold. Unlike its operations in China, which links its users’ accounts to Alipay, Qubu operations in Malaysia uses direct online bank transfers for candy trading. It’s not immediately clear if the scheme is on the local banking authority’s radar.
Qubu said it would issue one billion candies in total and it’s practically free to sign up for the app. But the app and its promoters heavily suggested that every new user should try to recruit a downline to maximise their candy output (“the more you promote the app to others, the more you will earn get rewards” as it says on the flier). The app divides its users into five tiers with higher-level users getting more candies and fewer transaction charges.
A promoter of the app in Kuala Lumpur told KrASIA that Qubu has about 50,000 users in Malaysia so far and the top three users are earning between MYR 3,000 and MYR 6,000 monthly. He also claimed that a total of 10 stores in the same shopping mall have now accepted candies for payment. KrASIA was unable to independently verify his claim.
It is understood that Qubu has active operations in at least two Malaysia cities, Kuala Lumpur and Johor Bahru—both with big local Chinese communities, since September. Qubu has a brick-and-mortar store in central Kuala Lumpur since November and the app’s users and promoters appear to have regular weekend meet-ups in the Malaysian capital’s Bukit Jalil district.
The app claimed to be one of the minor sponsors of Mrs Malaysia Universe and Mrs Elite Malaysia Universe 2019 and pictures on social media show Qubu logo appeared on some billboards of the beauty contest’s finale. An official document viewed by KrASIA shows that Qubu promoters had secured the official approval for hosting a running event next January in Wilayah Persekutuan Putrajaya, a city south of Kuala Lumpur.
The timing of Qubu’s entry into Malaysia coincided with the Chinese government’s crackdown of the app in September. The local market regulator in Changsha, the capital of central China’s Hunan province, said it has placed Qubu under investigation for illegal fundraising and financial fraud. The app has since claimed to have moved its headquarters from Changsha to Chongqing, one of China’s four municipalities.
Zulkarnain Mohd Yasin, the Chief Compliance Officer at the Malaysian Communications and Multimedia Commission, said his agency had not received any complaint of Qubu or any request for an investigation of the app from other government agencies so far.
The consumer hotline of the Ministry of Domestic Trade and Consumer Affairs, the government agency which is in charge of probing pyramid schemes, said they have not received any consumer complaint regarding the app yet.
Additional reporting by Sharmila Ganapathy in Kuala Lumpur