Ofo denies using GSE cryptocurrency for fundraising

Sep 25, 2018

2 min read

Troubled bike rental platform ofo has denied media reports claiming that it used a digital currency called GSE (Global sharing economy) for fundraising.

The Chinese company issued a statement on September 25 saying that the reports are grossly untrue and the relationship between the bike rental company and GSENetwork, the company behind the GSE token, is only a market cooperation. The new round of financing for which ofo used GSE is “completely non-existent,” ofo wrote on its Weibo account.

*Ofo’s announcement published on China’s Twitter-like social platform Weibo (Image credit: ofo)*

The company behind the sea of yellow bikes teamed up with GSENetwork in March to offer its users the possibility to mine currency while riding bicycles. The “Ride and Earn” scheme was first launched in Singapore, not surprising considering China’s strict stance towards initial coin offerings or any cryptocurrency trading.

At the time of the launch, Singapore-based GSENetwork was rumored to be actually set up by ofo staff. More recently, the duo started offering the program in Japan and South Korea (although the future of the South Korean project might be dim since ofo just pulled out of the market).

Chinese news outlet Bianews published that ofo used the GSE cryptocurrency for fundraising in July, one month after GSENetwork listed on cryptocurrency trading site Gate.io. According to the sources quoted by the report, an ofo official reached out to GSENetwork and subscribed for a share of tokens worth 600ETH through The Token Fund, a digital assets investment platform. Token Fund employees also participated in the fundraising project.

The source also told Bianews that a The Token Fund senior official described the fundraising as a fraud: since ofo does not have any money, this was a way to scam out some cash and ofo did not give back tokens as promised.

Ofo’s recent money problems have been well publicized. The company has been pulling out of the international market which aside from South Korea, include the US, United Kingdom, Spain, India, and Australia. The company is also said to have problems in paying its employees while rumors of investments or acquisitions are appearing almost every week.

Rumors of ofo using cryptocurrency for fundraising are also not new. Ofo has been exploring blockchain technology for some time. Founder and CEO of ofo, Dai Wei, personally invested into blockchain and cryptocurrency platform TRON.