News / Africa
MMM South Africa is still alive and recruiting
13 Apr 2016 at 11:29hrs | Views
After news emerged that MMM Global's Republic of Bitcoin collapsed over the weekend, the South African wing of MMM said its system is not a Ponzi or pyramid scheme and is not affected by the crash.
The scheme was named for its Russian founders, Sergei Mavrodi, his brother Vyacheslav Mavrodi, and Olga Melnikova - the three Ms standing for their surnames. The scheme was introduced in South Africa in 2015 with obnoxious advertising that told people to 'stop being poor' - the scheme claimed it could generate a "30% per month" return through a "social financial network"
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, which they can withdraw in rands. They can apparently get 30% return on their rand investment by doing so. According to a City Press report on Sunday on MMM, the Consumer Protection Act describes a pyramid scheme as any business model that promises an investor an annual interest rate of 20% above the repo rate, which is currently at 7%.
The MMM SA website describes its scheme in a way that resembles a stokvel, which is "a society formed to hold regular parties that are funded by the members and generate profits for the hosts".
The MMM scheme depended on its own parallel currency, the mavros, for storing and clearing value. The latest MMM Global scheme (which collapsed on the weekend), however, turned to bitcoin for both payments processing and value preservation. Mavrodi has in the past claimed that the MMM scheme has been a key influencer of the bitcoin price. So far the price of bitcoin appears to be unaffected."
The Mzansi "community" has been growing in numbers over the years, as South Africans look for ways to escape debt and poverty. It has even been described as a stokvel by some.
Officially, the South African platform said its members are encouraged to donate money to others by rewarding them with the bitcoin currency in return. Because the value of bitcoin often increases, a donor can apparently get 30% return on their rand investment by doing so.
Source - online