MMM's global pyramid collapses - report

Cape Town - 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, News24.com.

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.

Officially, the SA platform said its members are encouraged to donate money to others by rewarding them with the bitcoin-linked virtual currency - Mavros - in return, and can apparently get 30% return on their rand investment by doing so. A Ponzi scheme occurs when a return is 20% higher than the repo rate, which in SA is 7%.

"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 be able to pay 100% per month."

The alleged scheme is based on the bitcoin currency, which is a digital asset and a payment system.

The South African version of MMM, which offers 30% returns, is still operational and said the crash will not affect is members.