Bitcoin’s rise in African markets is driven by an old Russian ponzi scheme

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“Welcome to the System! Together we will change the world!”

These are the words I found scrawled at the bottom of a web page, right next to a picture of Sergei Mavrodi, a convicted Russian fraudster infamous for operating Mavrodi Mundial Moneybox (or MMM), one of the world’s largest ponzi schemes.

Two decades after MMM was shut down, the organization reemerged under new branding, as a technology-driven “financial mutual-aid network” that uses Bitcoin to provide its members up to 100% returns on their contributions. If MMM’s participation numbers are to be believed—they claim to have over 200 million participants—they may be one of the biggest drivers of Bitcoin adoption in the world today, especially in low-income areas.

Social trust

I first heard of MMM on a hot afternoon in Kenya in 2016, when a friend’s parents sat me down on their living room couch to ask me whether or not they should join a bitcoin charity at church. A friend from their congregation had invited them to contribute funds, promising that their donations would not only help others, but would also give them access to more financial support in the future.

They didn’t know exactly how it would work, but it had something to do with investing in Bitcoin. As the former head of social innovation for MIT’s Digital Currency Initiative, I was the person they sought out to advise them on whether or not this Bitcoin thing was a good idea. It wasn’t. MMM’s pitch had followed a familiar script, one that promised easy riches with the help of magical new technology.

 

Culled from: https://qz.com/1100886/bitcoin-in-africa-is-driven-by-mmm-mavrodi-ponzi-scheme/

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