Mavrodi disappears as MMM implodes

MMM Global has closed down the “Republic of Bitcoin” (RB), following the revelation that it was not able to pay monthly returns of 100%, while South African members of the self-proclaimed “social financial network” are complaining that their Mavro (the internal currency of the system, not to be confused with mojo) has been frozen.

Meanwhile, the founder of MMM, Sergey Mavrodi, a convicted Russian criminal who served jail time for fraud, allegedly executed his exit strategy a few weeks ago.

Over the weekend, MMM Global announced on its Facebook page that the RB “was an experiment, and, unfortunately, it failed”.

In South Africa, MMM advertises growth of 30% per month on deposits, which is in contravention of the Consumer Protection Act (CPA) that says a ponzi or pyramid scheme exists when an annual interest rate of 20% above repo is promised.

Offering a potential annual interest of 360%, MMM is clearly in contravention of the maximum 27% that can be offered in terms of the CPA.

The Hawks have opened an enquiry. “Our challenge is jurisdiction since everything is done through the internet,” Hawks spokesperson Hangwani Mulaudzi told Moneyweb. “Another challenge is there are no cases opened by investors, which is a setback to the ongoing enquiry.”

According to MMM Global, all the “RB-Mavro” will be transferred to the MMM structure in participants’ respective countries, a process that usually takes six months.

Some local members, meanwhile, complain their Mavro has been frozen.

According to the local administrators, South Africans who participated in RB will be moved to MMM South Africa and carry on as usual.

Mavrodi has made no comment on the latest developments, prompting a website that investigates multi-level marketing schemes to suggest that he has fled.