After being prohibited in China, the notorious globally operating Russian Ponzi scheme MMM, which operates with bitcoins, is now becoming hype in Nigeria.
The reason why this kind of scheme enjoys such popularity may lie in ignorance, illiteracy, belief in the supernatural and the gradually deteriorating economy of the country, claim several Nigerian respondents, as quoted in a recent article by Cointelegraph.
As the economy is in decline, people are trying to improve their situation by all possible and impossible means. And high-yield investment programs may seem especially appealing as they promise easy profit without any effort applied.
In the meantime, the population is growing, counting nearly 187 million people in 2016, many of whom barely have any access to the Internet. Due to the lack of Internet literacy, these people are keen to believe anything that comes from the World Wide Web, thinks Onyeka Ukasoanya, ex-banker with United Bank for Africa. Therefore, they can easily become victims of Sergei Mavrodi, the founder of MMM.
Superstition also works for the case, claims Hetty Hembadoon Orkuma, the founder and owner of Coffee Coloured Books. If people generally believe that supreme powers can give them something without the need to work for it, then MMM would not look suspicious to them.
Besides, the company uses the rhetoric that may well appeal to the poorest and the most vulnerable. “The modern world is bad. It is inhumane, unfair and unjust,” reads the organisation’s website. “Why do some people have everything, but others have nothing?” The whole financial world is a pyramid, claims the company, and MMM is here to establish a new, fair financial order. MMM positions itself as a revolutionary enterprise of mutual aid that will disrupt the world of social relations the same way that bitcoin has disrupted the finance.
At the same time, the organisation denies any accusations of cheating or fraud, claiming that it makes no promises. Indeed, the website contains a warning: “You can lose all your money. Always remember about this and participate only with spare money. Or do not participate at all! Amen :-))”
No doubt, MMM’s activity has a bad impact on the reputation of bitcoin. With Mavrodi stating that he alone can dramatically influence the cryptocurrency economy (by refusing to accept bitcoin, for instance), digital money in public opinion becomes strongly associated with Ponzi schemes.
China’s Central Bank recently warned the country’s citizens against MMM and officially proclaimed the company illegal. The announcement came after Chinese government received a warning from Oleg Markov, the head of Russian Federal Service for Financial Monitoring. The official predicted the collapse of the scheme in China referring to the precedent in Russia.
In 1989-1995, Mavrodi operated the MMM scheme in the Soviet Union, later Russian Federation, which reportedly was joined by 10-15 mln participants. In 2007, he was sentenced by Russian authorities to 4.5 years in prison for financial fraud.
Andrew Levich
