Alleged SA Ponzi scheme MMM’s global pyramid collapses

OrbitalDawn

Ulysses Everett McGill
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Aug 26, 2011
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Russian convict Sergey Mavrodi has allegedly gone into hiding after announcing that his Bitcoin-based MMM Global scheme had failed and was shutting down this weekend.

MMM South Africa – its local branch - is one of nine companies being investigated for being an alleged Ponzi scheme by the South African Police Service’s Specialised Commercial Crimes Unit, after the National Consumer Commission’s initial probe in 2015.

The South African “community” has been growing in numbers over the years, as South Africans seek ways to escape debt and poverty. It has even been described as a stokvel by some, and has become an emotive topic for those who buy into it.

“We regret to inform you that we have to close down the Republic of Bitcoin. It was an experiment, and, unfortunately, it failed,” the last Facebook entry on MMM Global states. “We turned out not to able to pay 100% per month.”

The South African branch offers 30% returns. The alleged scheme is based on the bitcoin currency, which is a digital asset and a payment system.

MMM Global cannot sustain paying

A website that investigates multi-level marketing schemes predicted the collapse a few days before it happened.

On April 9, it revealed the implosion. “The financial apocalypse is upon us, MMM Global has collapsed,” BehindMLM reported.

“MMM Global’s Ponzi clones offering a lower percentage haven’t ‘proved’ themselves any more than MMM Global did,” it said.

“MMM Global cannot sustain paying out more than is invested. And as long as affiliate investment is the only source of revenue entering the scheme, any MMM Global scheme will ultimately collapse.

“They’ll continue to pay ROIs (return on investments) until withdrawals exceed the rate of new investment, and then run out of money all the same. One only needs to look at the collapse of MMM China for evidence of what’s to come.

“Unfortunately for most MMM Global investors, the collapse is the end of the line. Those unlucky enough to live in countries where MMM Global runs secondary scams (like South Africa), were informed their accounts would be transferred over.”

Mavrodi has executed his exit strategy - claim

BehindMLM said Mavrodi “executed his exit strategy a few weeks ago. On March 20th Mavrodi informed investors there would be no more news updates published to the MMM Global website.”

“Mavrodi has not been heard from or seen since, and is presumed to be on the run. It’s highly likely he withdrew and/or transferred out as much of the money he stole from investors before fleeing.”

Financial Times reported on Monday that, while it is yet to confirm with its Mavrodi sources, “if internet reports are anything to go by it looks like Mavrodi’s latest scheme … dubbed a ‘mutual aid social network’ … collapsed over the weekend, with thousands of investors (a lot of them in emerging markets) locked out of investment accounts they had been promised would yield them 100% returns per month.”

MMM SA defends operation

However, MMM Global South Africa refuted the claims that it was a Ponzi scheme or that it was collapsing on Monday.

“In the MMM community there are many different countries,” a member of the MMM SA team said in a Facebook message to Fin24 on Monday.

“One of them was the Republic of Bitcoin. It was a ‘synthetic’ country which united participants from many different countries who provided and received help with bitcoins.

“Sometimes it created confusion for the people, they asked whether they should join the Republic of Bitcoin (RB) or MMM SA, RB or MMM France, etc.

“We decided to dissolve the Republic of Bitcoin and people will continue to participate in their specific countries. So, those South Africans who participated in the Republic of Bitcoin will be moved to MMM South Africa. And people will be able to continue to participate and will continue to receive help on the South African Platform.”

MMM South Africa calls itself "a community of ordinary people, selflessly helping each other" on its colourful website. "The goal here is not the money. The goal is to destroy the world's unjust financial system."

Not a Ponzi scheme - member

The anonymous member told Fin24 that MMM does not receive payment and does not pay its members, so therefore cannot be classified a Ponzi scheme. “MMM is a platform for the exchange of donations where people send money (pay) to each other.”

“When you call the MMM Community a Ponzi scheme, it creates a misunderstanding,” the person said. “In MMM people donate (not invest) money to each other without any promises or guarantees. MMM does not offer any return or an interest rate.

“MMM honestly tell people how it really works and do not promise people any return on the investments. As a donation programme, how is it possible to lose your donation? In MMM people ask each other to help them. It depends on the members themselves to maintain the continuation of the process of the provision of help to each other.

“MMM does not make any promises and do not claim to generate any return as Ponzi schemes do. On the MMM website, it is written with capital letters that there are no promises or guarantees.

After MMM members donate money, they may be rewarded with Mavro (the bitcoin currency), the person said.

“Usually Mavro grows 30% a month. Mavro is not an asset or currency, Mavro is a motivation instrument. With Mavro, MMM motivates its members to help each other by providing financial assistance.

“Because Mavro is not a financial instrument, its growth rate can be easily adjusted to balance PH (providing help, inflow) and GH (getting help, outflow). The flow of provided assistance and assistance received will always be kept in balance.

“The MMM Community has been operating for many years. More and more people are joining now. Unfortunately, sometimes there is a misunderstanding when people try to present MMM as an investment project or money making scheme.”

Source:

http://www.fin24.com/Money/Investme...scheme-mmms-global-pyramid-collapses-20160412
 

TheChamp

Honorary Master
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Feb 26, 2011
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oh poor people, no matter how unjust the world financial system is, we cannot just wake up an build our own financial system which is based on imaginary and unrealistic investments projects
 

blunomore

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Let me first say that I have no knowledge of how this scheme worked; I just read posters always joking on MyBB about bitcoins.

I am a member of a FB group on parenting. This topic came up and the comments are amazing. Some people who apparently participated, refuse to believe the collapse because they got their "30% payout yesterday". Here is a gem: "Most people that i know, are joining it knowing very well that it's a ponzi scheme and they are willing to take a risk so please allow..."
 

The_Librarian

Another MyBB
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Ai ja. There will always be new Ponzi schemes. Best to get in early, and bail out early.

Problem is, you will have a most joyful time when the police comes knocking on your door...
 

saor

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I just read posters always joking on MyBB about bitcoins.
These schemes become much more attractive when allowing one to pay with bitcoin. There's no longer the hassle of doing EFT's and setting up banking details. The funding is distanced from your bank account and instead you just click a few times to transfer some bitcoin and you're done.

I saw a scheme today that offered a 100% ROI month to month.
They accept bitcoin.
So easy to just say "ah **** it" and transfer the minimum amount to see what happens.
Eish.
 

garp

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Doesn't seem to be having any effect on the Bitcoin price. Reddit commentators seem to be of the opinion that MMM activity wound down some time ago and that the effects on the BTC price have already been discounted by punters.
 

APoc184

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Sep 6, 2008
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Lolz.

Keeping a close eye on one of my work colleagues. Don't think he has heard yet.

He recruited plenty of people and invested quite a bit of money as far as I know.
 

ice_cubes

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Doesn't seem to be having any effect on the Bitcoin price. Reddit commentators seem to be of the opinion that MMM activity wound down some time ago and that the effects on the BTC price have already been discounted by punters.

Price wont drop significantly because MMM is not the only one taking bitcoins, but it was one of the bigger gameplayers
 

ice_cubes

Executive Member
Joined
Mar 24, 2011
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5,138
Lolz.

Keeping a close eye on one of my work colleagues. Don't think he has heard yet.

He recruited plenty of people and invested quite a bit of money as far as I know.

lol! lets hope it was RSA and not Global (that closed)...else you will be watching a lekka boxing match at work :D
 

Cray

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Oct 11, 2010
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30,715
Let me first say that I have no knowledge of how this scheme worked; I just read posters always joking on MyBB about bitcoins.

I am a member of a FB group on parenting. This topic came up and the comments are amazing. Some people who apparently participated, refuse to believe the collapse because they got their "30% payout yesterday". Here is a gem: "Most people that i know, are joining it knowing very well that it's a ponzi scheme and they are willing to take a risk so please allow..."

In other words, "I know this scheme is screwing people out of their money, I am just hoping to be a screwer rather than screwee"
 

RandomGeek

Expert Member
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May 14, 2015
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Why am I not surprised? Greed makes people lose all sense of logic. 30% , risk free return is not achievable for vark's sake. And normally the people who will lose the most will be those who can least afford to lose
 

JungleBoy

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Apr 18, 2008
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5,012
Why am I not surprised? Greed makes people lose all sense of logic. 30% , risk free return is not achievable for vark's sake. And normally the people who will lose the most will be those who can least afford to lose

Well in the case of MMM the risk of losing it all was highlighted in big red letters on the front page of the website and yet some people thought they should could beat the odds. How stupid can one be?
 

Excalibur

Executive Member
Joined
Apr 29, 2007
Messages
5,622
These schemes become much more attractive when allowing one to pay with bitcoin. There's no longer the hassle of doing EFT's and setting up banking details. The funding is distanced from your bank account and instead you just click a few times to transfer some bitcoin and you're done.

I saw a scheme today that offered a 100% ROI month to month.
They accept bitcoin.
So easy to just say "ah **** it" and transfer the minimum amount to see what happens.
Eish.
And how do you liquidate the bitcoins?
 
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