Chinese authorities cracked down on a high-profile blockchain company that provides data services to online peer-to-peer (P2P) lenders.
The police in the eastern city of Hangzhou on Wednesday raided and sealed the office of Hangzhou Cunxin Data Technology Co., the operator of blockchain project GXChain. The police told Caixin that further information will be disclosed later.
Phone calls to the company’s founder and Chief Executive Huang Minqiang and another employee by a Caixin reporter wouldn’t go through. Chinese bitcoin tycoon Li Xiaolai, a major investor with a 7.5% stake in the company, declined to comment.
The reason for the crackdown was unknown, but some said they suspected it may be related to the company’s personal credit data business.
“I have no idea why the police took action against GXChain,” said Dovey Wan, founding partner of blockchain-based investment company Primitive Ventures, on Twitter Wednesday. “The trigger might be their data business—they sell processed personal credit data, which is a highly sensitive area now in China.”
Wan also posted a video on Twitter showing GXChain’s office gate being sealed by police and saying “all executives of the company are now with the police for interrogation,” citing a source close to Hangzhou local police.
Founded in 2016, GXChain is a blockchain company that offers data uploading, storage and exchange to enterprises in industries including internet finance.
Among the clients listed on GXChain’s website are Alibaba-backed ZhongAn Technology, online loan search platform Rong360.com and New York-listed P2P lending platform PPDAI Group.
GXChain is known for using data scraping and data crawling to obtain personal credit data from online marketplace Taobao and digital payment platform Alipay. GXChain is one of a few companies that can extract a Zhima Credit score, a private personal credit-scoring program run by Alibaba’s Ant Financial Services Group. Zhima Credit doesn’t share the scores with any third party, and there are some technical difficulties to extract the data, an industry participant told Caixin.
Data crawlers sometimes could cross the line because clients that buy the data are not authorized to use it, the industry participant said.
GXChain CEO Huang once told Caixin that GXChain’s vision is to return the ownership of data to users, and he expressed outrage over the misuse of personal data by the industry.
Even though GXChain is high-profile in the blockchain industry, it was not included in the first batch of 197 blockchain-based information service providers that were granted registration in March by China’s cyberspace information regulator.
Contact reporter Denise Jia (firstname.lastname@example.org)
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