In mid-November when the Bitcoin rate got soared, all the world’s media started talking about Sergei Mavrodi, who, no less, stated that he could influence the rate. And, supposedly, if he should refuse to use cryptocurrency in his project MMM China, bitcoin exchange rate would collapse.
Thanks to the media attention Sergey Mavrodi became Bernard Madoff for the poor, not only having built the world scale pyramid scheme, but also taught his down-to-earth audience to use a new, quite complex financial instrument. Well, he robbed them in the end, of course.
It took Mavrodi only four years to get to the complex Chinese market, during which the pyramid migrated from Russia to the CIS, and from there — to Europe and America, and then to Asia. New depositors were now lured with not only easy money, but also with the fight against unfair financial market: “to take and share” money of greedy bankers, who were still doomed to collapse — that is the declared Mavrodi’s goal.
The Chinese are known to be very risky people: they may lose everything, and are well aware of that sin. Obviously, it is the famous Chinese taste for gambling that Sergei Mavrodi counted on by opening MMM-China division in 2015. Mavrodi, of course, strongly supported the rumors running in The Financial Times on the MMM-China responsibility for Bitcoin rise.
Mavrodi even tried to become a cryptocurrency ideologue. But short Partnership of MMM with Bitcoin Foundation Fund ended at the fund’s initiative. The organization has decided that the MMM reputation is worse that bitcoin reputation, which is used to buy weapons and drugs from time to time.
Of course, Mavrodi’s role in shaping Bitcoin rate is, to put it mildly, exaggerated. According to the the Chinese testimonies since mid-November, MMM-China site has not opened or has been loaded very slowly through a variety of anonymizers or Tor browser from China itself.
“For China, Mavrodi is nobody, a laovay (as white foreigners are called in China, sometimes with a hint of disdain). He must have worked through partners — the Chinese, but he promotes himself, ” Anna, an interpreter from Beijing, says surprisingly. Approximately such opinions are always expressed in conversations between the Chinese and foreigners living there.
Does Mavrody affect Bitcoin’s value?
in early November the cryptocurrency rate grew by 25%, up to $ 490 per Bitcoin, and it really could happen for a variety of reasons: because of the connection of one of the exchanges, Gemini, to the Chicago Stock Exchange, the gradual recognition of Bitcoin as a commodity in the United States, successful speculative games in this particular market. However, it could be Mavrodi. millions of investors were not required to influence the Bitcoins rate — a few thousand could well be enough.
“There was a case where the Bitcoin rate got soared by tenfold because of players’ mistakes, and $ 20-25 million was enough for that. Therefore, even $ 2-3 million is enough to inflate the rate”, — says Alexander Butmanov, the managing partner of Dream Team, the hedge fund. Thus, MMM would have just 13 million yuan or, considering a minimum fee of 65 yuan, 200 thousand members enough to influence the Bitcoin rate.
The cryptocurrency itself is banned in China, so to buy it you will have to show the knowledge and skills to bypass the system for blocking unwanted sites. According to statistics, 60% of pyramid depositors are people over 50 years. Since buying Bitcoins for such people tends to be too challenging, both local bookmakers (legal and not) come to help them.
Even if MMM in China is a small scale scam, we must pay tribute to Sergei Mavrodi, who managed to take credit for the growth of cryptocurrency for international PR, as a real schemer does.
МММ was a Russian company that perpetrated one of the world’s largest Ponzi schemes of all time, in the 1990s. By different estimates from 5 to 40 million people lost up to $10 billion. The exact figures are not known even to the founders.
Mavrodi went to jail in 2003 and was released in 2007, only to soon start another similar scheme nicknamed ‘MMM-2011’ while also expanding his operations to India with what was called ‘MMM India.’ These operations were shut down earlier in 2012, but he outright referred to them publicly as pyramid schemes on his blog, as Russia’s legal system was not equipped to penalize such financial structures.