China-based Kunlun Group dropped plans to float dating app Grindr in favour of selling the business, after US government authorities expressed concern about the safety of user data under its ownership, Reuters reported.

The Committee on Foreign Investment in the United States (CFIUS) did not disclose why it wants Kunlun to sell but Reuters stated the move ties into the country’s scrutiny of the safety of personal data. Kunlun will seek to auction Grindr, with investment bank Cowen handling the transaction, the news agency said.

Grindr’s privacy policy states it collects data on users including location, messages and, in some cases, their HIV status, which has been controversial.

In the past researchers have also shown how hackers can find the location of users on the app.

Kunlun’s control of the service also worried privacy advocates in the US: two senators sent a letter to Grindr in 2018 asking how it was protecting user privacy.

Some reports also stated the US is worried data collected via the app could be used to blackmail American officials.

Kunlun bought 60 per cent of the service in January 2016 for $93 million and coughed up $152 million for the remaining stake in 2018.

At the time Grindr counted more than 3.3 million daily active users and claimed to be the largest LGBTQ mobile social network in the world.

In a recent filing with the Chinese Securities Regulatory Commission Kunlun said: “We are in talks with CFIUS at the moment. We have not reached any agreement with CFIUS…We will disclose any future development”.

Kunlun began preparing for an IPO of Grindr in 2018, but now sees an auction as providing the quickest route to the exit.