No, the actual reason is that Chinese doctors noted a statistical abberation in their coronavirus patients: none of the patients had lupus. They called around and confirmed it, none of the hospitals had any patients with lupus. And the standard chinese treatment for lupus is... chloroquine.
https://www.jqknews.com/news/388543-The_novel_coronavirus_pn...
Chloroquine has proceeded from statistical anomaly, to successful case studies, to successful non-random trials, and now is in random trials. I'm not a doctor but I think there's a pretty good chance it'll be effective.
Yes, it is not officially approved yet, but it is being deployed in China, Korea, and other countries off-label. Right now there are no other options. I'd take chloroquine over nothing. Overall it is not pleasant but there are few dangerous side effects in the short term (retinopathy is a possible side effect if duration of treatment is on the order of months to years). It is an over-the-counter medication in a lot of the world, it is behind the counter in a lot of other places (including the UK).
(the US just likes making sure doctors get paid even if a medication is quite safe. There are a lot of medications like oral contraceptives that are routinely done over-the-counter in most other places that we insist are so wildly dangerous you couldn't begin and discontinue them if you noticed side effects. And on the flip side, there's lots of drugs like tylenol that we know to be horribly unsafe and yet they remain OTC anyway, or even in "abuse resistant" combination products. Chloroquine is a pretty standard antimalarial and places that have malaria don't think it's a big enough deal that you need a doctor to get it.)
Given the lack of other options, given the known nature of the drug, if I was in a hospital dying of COVID would I want to give it a shot? Yes. Same principle as experimental cancer drugs. Some chance is better than no chance.
Anyone we can treat with pharmaceutical interventions instead of ventilators frees up those ventilators for more critical patients. Even if they still have to remain under some degree of medical supervision, it frees up ICU beds.