At the height of its business operations, the online investment company,, had around 200 million registered users.

Tantalizing tales of up 80% returns had potential clients clamoring to sign up for the financial firm’s “get rich quick” scheme. Even the full name of the company, Qianbao, had the veneer of success, as it translates into “money treasure.”

But now the founder of the site, Zhang Xiaolei, is in police custody after turning himself in just before the start of the new year.

He has been accused of illegally raising 70 billion yuan (US$11 billion), according to sources close to the Chinese authorities and reported in the mainland media.

If those allegations are true, this would be the largest online investment fraud in China’s history.

“This shows the reality that many Chinese people are still short of money and are crazy for high-returning investment channels,” Li Chao, an analyst at market consultancy iResearch in Beijing, told the state-owned Global Times.

High yielding?

For investors like Mu, a big reason why they don’t break off from Qbao is due to its high but seemingly steady investment returns.

According to Mu, the annualized return of Qbao’s investment was about 56 percent around October 2015, the highest ever level. However, the rate has been dropping gradually since, and in 2017, the company’s annualized return reached 36 percent.

“Such returns include dividends from Qbao’s real-economy projects, as well as pay from the website to investors who were carrying out daily missions like surveys and raising suggestions for the company,” he said.

Mu also said that he was very confident about the safety of his investment in Qbao because the returns are backed by a variety of high-return real-economy projects conducted by the company.

According to media reports, Jiangsu Qianwang Information Industry Group, of which Qbao was a subordinate, has invested in an array of industries ranging from ride-sharing, wine and drones, to healthcare and food.

A report from in October 2016 also noted that Qbao owned at least 30 billion ($4.62 billion) worth of property by that time.

According to Mu, the company switched its focus to WeChat e-commerce in 2015, which has proved to be a profitable business given Qbao’s gigantic user base and strong user adhesiveness.

“At least for me, Qbao has never broken its paying back promise,” he said.

Some experts the Global Time talked to nevertheless pointed to the risks of Qbao’s business model.

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