MMM Nigeria: Notorious “Ponzi Scheme” Enables Bitcoin for Payments
MMM Nigeria - a prominent multi-marketing Ponzi scheme - has recently announced that it is making a comeback enabling Bitcoin as a form of payment.
MMM Nigeria - a prominent multi-marketing Ponzi scheme - has recently announced that it is making a comeback enabling Bitcoin as a form of payment. MMM was founded by Sergei Mavrodi in Russia in the 1990s, the original scheme has collapsed resulting in participants losing billions of dollars.
However, it has blossomed again with one simple model: participants committed to sending money to other participants and after a month, they got their ‘investments’ back plus 30 percent interest from other participants of the pyramid.
There is a high risk that this lending money chain will eventually collapse and millions of people will lose their money… again. However, the number of participants keeps growing, even despite the questionable logic of the whole enterprise and recent daunting events.
In mid-December 2016, MMM has frozen accounts of participants, reportedly, more than three million Nigerians were affected. The later statement said that the scheme had to temporarily suspend operations due to the heavy workload in the system.
Now with MAVRO-BTC
Rebooting operations a month later, MMM announced the introduction of Bitcoin-based currency, MAVRO-BTC, to “make participation in MMM more comfortable.” Prior to the freeze of participants’ accounts, MMM supported a number of transactions through Bitcoin, which were anyway recalculated into the Nigerian Naira.
The new scheme claims to enable payouts in Bitcoin, in addition to Nigeria’s fiat currency, the Naira. Referring to the Bitcoin’s recent price growth, it promises further returns in addition to a “30 percent monthly growth.” In the case of falling Bitcoin price, the scheme promises participants that they will be able to convert their balances from Bitcoins to Naira.
Plotting its comeback plans MMM has been throwing a number of measures to get its community active again. Thus, participants were asked to complete a number of online and offline tasks to promote the scheme and drive traffic and participation. As apparently, participation in MMM implies not only opportunities but also responsibilities for the spread of MMM.
Regulators warn the public
The National capital market regulator, the Securities and Exchange Commission (SEC) reacted in a timely manner and warned the public against investing in cryptocurrencies, including Bitcoin.
The warning read:
“The attention of the Securities and Exchange Commission has been drawn to radio advertisements and other modes of solicitations of the public to invest in cryptocurrencies such as Swisscoin, OneCoin, Bitcoin and other such virtual or digital currencies. The public is hereby advised to exercise extreme caution with regard to digital cryptocurrencies as a vehicle for investments.”
The regulator reminded that currently none of the companies advertising cryptocurrency-related investments were recognized or authorized to receive deposits, therefore there will be no consumer protection available to those investing in digital currencies if the scheme goes bust.
- Source: AFP/Getty
A scheme for money laundering
Investigators are worried that despite the fact that Bitcoin is traded by legitimate users and more retailers are accepting it as a form of payment, international criminals often turn to cryptocurrency, is what definitely puts a stain on its reputat