The global unit of the alleged Russian Ponzi scheme, MMM, has collapsed, after a failed BitCoin “experiment” failed to pay out clients.<\/p>\n
The scheme, which was established by convicted Russian fraudster<\/a>, Sergey Mavrodi, posted a notification to its Facebook page, saying that it had to\u00a0close down “the Republic of Bitcoin” – a website that promised up to 100% returns on donations.<\/p>\n “It was an experiment, and, unfortunately, it failed. We turned out not to able to pay 100% per month. We can easily pay 30% per month (and we proved it in practice in many countries), but 100% is too much even for us,” the group said.<\/p>\n According to\u00a0multi-level marketing (MLM) investigation publication, Behind MLM<\/a>, the shuttering of the site is evidence that the scheme has collapsed\u00a0– and that all similar schemes linked to the business in the various countries it operates in will soon follow suit.<\/p>\n The site predicted the collapse\u00a0a\u00a0day prior to it happening.<\/p>\n “The\u00a0only reason a Ponzi scheme stops paying out is if there are banking issues or they run out of money.\u00a0MMM Global\u2019s use of BitCoin rules out the former, so with investors not paid out for over a month the writing was on the wall.”<\/p>\n “MMM Global\u00a0cannot sustain paying out more than is invested. And as long as affiliate investment is the only source of revenue entering the scheme,\u00a0any MMM Global scheme will ultimately collapse<\/a>,” the report said.<\/p>\n Mavrodi, who usually posts weekly video updates on the scheme’s Facebook page<\/a>, has not done so, and is speculated to have gone into hiding.<\/p>\n The South African branch of MMM ran into trouble earlier in the year, when Capitec started freezing the accounts of customers tied to the scheme.<\/p>\n The bank said that its security systems automatically pick up on suspicious activity in accounts and freezes transfers until an investigation takes place. The bank faced backlash from clients who invested in the scheme.<\/p>\n Users say the scheme works just like a stokvel<\/em>, and that the banks should not get involved in how they spend their money.<\/p>\n MMM is under investigation with the\u00a0National Consumer Commission listing it as a potential pyramid scheme.\u00a0The Consumer Protection Act describes any scheme that offers returns 20% above the repo rate (6.25%) as a \u201cmultiplication scheme\u201d \u2013 otherwise known as a Ponzi scheme.<\/p>\n The group\u2019s hook is the promise of high returns on investments \u2013 as much as 30% per month \u2013 along with \u201ctestimonials\u201d from clients who claim to have achieved great success with the scheme.<\/p>\n Despite this, the scheme says\u00a0explicitly that it does not guarantee anything, warning<\/a>\u00a0users that they might not be paid at all, and indeed, could lose all their money.<\/p>\n Russian \u2018Ponzi scheme\u2019 raises fraud flags at SA bank<\/a><\/strong><\/p>\n Gimmicks that took South Africans for a ride<\/a><\/strong><\/p>\n R699 car scandal: who\u2019s to blame?<\/a><\/strong><\/p>\nMMM South Africa<\/h3>\n
More on schemes<\/h3>\n
![warning<\/a>\u00a0users that they might not be paid at all, and indeed, could lose all their money.<\/p>\nMore on schemes<\/h3>\nRussian \u2018Ponzi scheme\u2019 raises fraud flags at SA bank<\/a><\/strong><\/p>\nGimmicks that took South Africans for a ride<\/a><\/strong><\/p>\nR699 car scandal: who\u2019s to blame?<\/a><\/strong><\/p>\nR699 car numbers shock<\/a><\/strong><\/p>\n","protected":false},"excerpt":{"rendered":"The global unit of the alleged Russian Ponzi scheme, MMM, has collapsed, after a failed BitCoin “experiment” failed to pay out clients – signalling a potential collapse of the local branch.<\/p>\n","protected":false},"author":10,"featured_media":120079,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[9872,11121],"tags":[5537,26,11037],"class_list":["post-120065","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-business","category-finance","tag-bitcoin","tag-headline","tag-mmm"],"_links":{"self":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts\/120065","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/users\/10"}],"replies":[{"embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/comments?post=120065"}],"version-history":[{"count":5,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts\/120065\/revisions"}],"predecessor-version":[{"id":120075,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts\/120065\/revisions\/120075"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/media\/120079"}],"wp:attachment":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/media?parent=120065"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/categories?post=120065"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/tags?post=120065"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}](\"http:\/\/businesstech.co.za\/news\/wp-content\/uploads\/2016\/01\/MMM-warning.png\"){kind=link}