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Subject: Value of ?bitcoin nears $500 as Russian fraudster’s social network gains traction
Excerpt: English text from the archived bilingual edition · Chinese edition
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Value of ?bitcoin nears $500 as Russian fraudster’s social network gains traction
The price of the cryptocurrency bitcoin surged yesterday to its highest in more than a year amid a wave of Chinese testimonials for a “social financial network” called MMM, which bears the hallmarks of a pyramid scheme
New members of MMM have to buy bitcoins to join the scheme, the brainchild of Sergey Mavrodi, a former Russian parliamentarian once jailed for fraud. MMM
The bitcoins are sent to other members of the network as “mutual aid”. Participants are promised a 30 per cent return a month, with bonuses for referrals or posting testimonials online
20 per cent interest and [a bonus] as a recommender, for a total of $7,750. I truly experienced the greatness of 3M and the sincerity of all the participants,” said Wen Qiang, one of the hundreds of MMM evangelists taking to YouTube in the past 24 hours
The bitcoin price surged by more than a fifth to above $490 in the latest spike for the virtual currency created in 2008
Championed by libertarians for its lack of centralised control, bitcoin lost three-quarters of its value in 2014 after the failure of a prominent exchange. Despite its fringe reputation bankers have in recent months expressed mounting interest in the underlying technology known as blockchain. MMM
MMM has elements typical of pyramid schemes, marked by rewards for recruitment and the promise of outsize profits. The flawed economics of such schemes all but doom them to collapse. MMM
MMM claims on its website that it is legal because the scheme involves money transfers between private persons. The price of bitcoin has more than doubled in the past month, to value existing stock at more than $7bn
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