MMM China collapses, govt issues warning
In an effort to dupe investors into thinking the scheme is run locally, Sergey Mavrodi has set up local chapters of his MMM Global Ponzi scheme.
Localized versions see the country name they operate in prefixed with “MMM” (MMM South Africa, MMM Egypt etc.).
The more prominent of MMM Global’s localized chapters is MMM China, which appears to have collapsed late last year.
Information on the collapse is sketchy, largely due to the collapse occurring in China and effecting Chinese investors.
Beijing-based publication Caixin Online has only recently covered the MMM China collapse in English, along with news of a recent government warning about the scheme.
Regarding the collapse, Caixin reports:
Several investors told Caixin the website closed in December, freezing their accounts without warning.
A December 25 announcement on the website said investment cycles and interest payments would be calculated differently in the future, and all previous requests for withdrawals had been canceled.
Investors could still not get into their accounts as of January 19.
Call me cynical, but I suspect the “different payment calculation” will probably see payments to affiliates universally reduced to $0.
One investor said he’d asked the police to probe MMM China but was ignored.
The police did not want to investigate because MMM and its Chinese operations are not registered in the country.
Nonetheless, sluggish Chinese officials have since issued a warning about the scam.
Believed to have been published on or around January 19th, the Ministry of Industry and Information Technology and the State Administration for Industry and Commerce warned investment in MMM China
presents huge risks to investors because it is operating illegally in the country and may have funneled funds abroad.
MMM China is among an emerging number of unlicensed organizations that aim to attract online investors with promises of high returns while employing a business model that looks to be a Ponzi scheme.
BehindMLM concluded as much last month in our own MMM Global review.
Whereas the names of localized chapters might be slightly different, the premise is the same: local investors dump funds into MMM Global’s BitCoin accounts, Mavrodi withdraws an undisclosed sum and whatever’s left is redistributed out to affiliates.
Needless to say that with monthly ROIs of 20% to 100% advertised, the collapse of MMM China comes as no surprise. Indeed with MMM Global itself coming up on two years itself, that too will probably collapse sometime this year.
The use of BitCoin makes it hard to estimate total investor losses, along with how many victims of the scheme exist worldwide. Mavrodi himself is believed to remain at large in Russia, with Russian authorities thus far refusing to take action.
Best of luck to whichever regulator finally takes it upon themselves to sort out this mess…