A Chinese company that acquired gay-dating app Grindr is reportedly selling it off after the US government labeled it a national security risk.
Chinese gaming company Beijing Kunlun Tech Co Ltd acquired a 60% stake in Grindr in 2016, before buying the rest in 2018.
But sources told Reuters that the company did not clear its purchase with the Committee on Foreign Investment in the United States (CFIUS), a US government agency which assesses the national security risk of foreign investments.
The sale prompted a review, after which CFIUS told Kunlun that its ownership of the California-based app constitutes a security risk, sources told Reuters.
The company is now looking to sell Grindr, according to the report, despite announcing preparations for an IPO in August 2018.
CFIUS last year blocked the acquisition of money transfer company MoneyGram International Inc by a Chinese financial group owned by billionaire Jack Ma, reportedly citing security concerns.
The US has increased scrutiny of app developers and the data they handle, which it argues could compromise the security of military or intelligence personnel.
Elliott Zaagman, a tech writer partly based in Beijing, said that apps like Grindr hold sensitive information about its users which could be exploited.
Grindr, which had 27 million users as of 2017, allows users to say whether they are HIV positive, and also allows users to send photos, which are often sexually explicit.
Zaagman says that, while China has an interest in hacking into such a database filled with personal information, they can probably breach the system “whether or not it’s owned by a Chinese company.”
“If a sophisticated state actor is determined to get into an app’s database, they will probably be able to find a way.”
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