China's government has advised citizens against the Russian Ponzi scheme founded by Sergey Mavrodi and using bitcoin digital currency, Beijing's online media Caixin reports.Mavrodi recently claimed that he could influence the whole bitcoin economy because one of his MMM financial schemes, the international structure MMM Global (Bitcoin Republic), operates solely in bitcoin.The MMM website is popular in China and has allegedly driven large amounts of cryptocurrency.In November Mavrodi expressed confidence that it was the popularity of MMM that caused the uprise of bitcoin price.This statement of the MMM founder drew the attention of officials, including the Russian Federal Service of Financial Monitoring.The head of the service Oleg Markov addressed China's government predicting collapse of the MMM scheme in the country.According to some investors, the MMM accounts went frozen on 25 December 2015 without warning and are still inaccessible for users as of 19 January.There are rumours that the scheme has collapsed.

The central government of China stated in an official announcement that Mavrodi's scheme is operating illegally in the country.The warning was published by the central bank, banking regulator, Ministry of Industry and Information Technology and State Administration for Industry and Commerce.lekkerurlaub bitcoinThe organisation is unlicensed in China and presents risks for investors, according to the officials.bitcoin lompakko varmuuskopioNone of the MMM websites is registered with the government or have their servers located in the country.bitcoin martin lechowiczFor this reason the police refused to investigate the case.In 1989-1995 Mavrodi operated the MMM scheme in Russia, which reportedly reached 10-15 mln participants.He was sentenced to 4.5 years in prison for financial fraud by Russian authorities in 2007.

Mavrodi started a new scheme in China about a year ago.The official notice warns the public that Mavrodi is an ex-convict.Alphaville is completely free.All you have to do is register.Ready to subscribe, View our subscription optionsIf you haven’t heard of the MMM Bitcoin scam yet consider yourself lucky, but this Ponzi scheme continues to do the rounds, both in the developing world and first world, to the point where SiliconANGLE’s previous coverage continues to gain traffic as more and more “members” attempt to sign up new users.So what is the MMM Bitcoin scam, which often goes by the name of MMM Global and regional variations such as MMM China?Here’s everything you need to know about the MMM Bitcoin scam.The original MMM was set up by Sergey Mavrodi in 1989 and morphed into a Ponzi scheme in around 1994, primarily based out of Russia.That original version of MMM resulted in Mavrodi, a former Russian parliamentarian, being jailed for fraud for running it.The current MMM Bitcoin version emerged in around 2011 following Mavrodi’s release from prison, and follows the same Ponzi structure as the original.

A Ponzi scheme is an illegal investment scheme where the person or organization running it pays returns to existing investors from capital paid into it by new investors, rather than profit actually earned by the company itself.Typically companies running such schemes offer higher than usual profits.Variations include the High Yield Investment Program (HYIP) which MMM Global falls under, in that it offers particularly high (even for Ponzi scheme) returns, or as the name suggests, a high yield.MMM Global/China likes to cloak what it’s offering by saying that it’s not a HYIP scheme, but a “mutual-aid program” where members pay each other … which is really just a fancy way of saying they’re a Ponzi scheme without actually saying so outright.The MMM scam’s mutual-aid program promises a 30 percent monthly return to investors who invest as little as $10, payable only by Bitcoin.A side program call “MMM Extra” offers a full-blown HYIP rate of a staggering 100 percent per month, or a cumulative 409,600 percent per year; if that doesn’t ring alarm bells you probably deserve at this point to lose your money to them.

MMM Global/China isn’t simply just your based level Ponzi scheme, at least in its current incarnation, in that it offers both an affiliate scheme and multi-level marketing (MLM) scheme on top of the base offering.With MMM, those who sign up are able to obtain affiliate payments for referrals or for posting positive testimonials online, with users receiving 10 percent from what the company refers to as “all donations of the participants you invited.” A multi-level marketing scheme is a system where a sales force is given a commission not only for sales they generate directly, but a cut of the salespeople they have recruited make as well; while an MLM in and of itself is not illegal (Amway is the most famous MLM of them all) many MLM’s end up being illegal as they rely more on the revenues passed along via the “downline” (the path from original recruiter down multiple levels as people they have signed up sign up others, and so forth, often as far as 10 levels deep) than they do the original product they were allegedly trying to sell.

The MMM MLM involves power users becoming managers who create their own multi-level multi-level structure that offer tiered bonuses from all contributions of the members of their structures, which in this case is their downline.MMM claims among other things that it’s not a high-yield investment program (HYIP), and that it is legal, because it is a mutual benefit fund that sees people “help each other for free, and absolutely consciously … transfer money directly to each other, from one bank account to another, without any conditions, guarantees and promises.” This is complete and utter rubbish.Ultimately the test of any of these sorts of things is whether the company involved is actually offering a product, or simply relying on payments from new investors to fund the returns of existing investors, and that’s exactly what MMM Global does.A Ponzi scheme is most definitely illegal in all Western jurisdictions, and in countries like China is classified as an unlicensed investment organization, which also makes it illegal.

The obvious answer is not to invest in a scam like MMM Global to begin with, but lets just say you do, or already have.There’s no clear answer here as it depends on the country you live in; ultimately authorities are primarily going to be interested in those running the scheme versus those sucked into it as investors (potentially victims).However, there is usually a distinct line between those who join, and those who actively recruit.If you are recruiting people to MMM Global/China or any of its similar country based variants, you are promoting an illegal activity and you may well be liable to prosecution.A not to dissimilar Bitcoin-based Ponzi scheme ran through Hong Kong and Taiwan last year and in both countries those promoting it, that is not the founders but those who signed up then tried to sign up others, were arrested over their involvement.There would be no difference in mainland China, or indeed any western country, should you be involved at this level.If you’ve already invested not knowing what you were getting yourself into, the bad news is that it’s highly unlikely you’ll ever get your money back.