MMM Global, the company that has been often associated with the terms “ponzi scheme” and “scam” , has announced that it is scrapping its Republic of Bitcoin.
“It [Republic of Bitcoin] was an experiment, it failed. We turned out not to able to pay 100% per month. We can easily pay 30% per month (and we proved it in practice in many countries), but 100% is too much even for us”, the company said in a blog post.
The bitcoin of the participants will be transferred to the MMM-structure of the countries to which the participants belong. The company promises that if there is no MMM-structure working in a country, it will be created within two weeks. It goes on to say that participants will be gradually paid back as the country of their residence develops.
While it remains to be seen if the investors get back their money, the blog post concluded saying, “This news is not very pleasant but there is nothing that can be done about it. It's not the end of the world.”
Earlier this year, Chinese government warned its citizens against MMM Global saying that it is operating illegally in the country. The organization is unlicensed in China and none of the MMM websites are registered with the government. In addition, even the servers are not located in the country. As the company is registered in Russia, it falls out of jurisdiction of Chinese government, who are left with the option of issuing warnings to the public.
Coinfox reported that from 1989-1995, Sergey Mavrodi operated the MMM scheme in Russia, which reportedly reached nearly 15 million participants. In 2007, he was sentenced to 4.5 years in prison for financial fraud by Russian authorities. Mavrodi started a new scheme in China about a year ago.
Ventures Africa reported last month that despite being labeled as Ponzi scheme in China, MMM Global has been flourishing in Nigeria.
