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.
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.”
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.”
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.”
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.”