MMM BSC

DESCRIPTION OF EVENTS

"JOIN MMM BLOCKCHAIN ​​SMART CONTRACT- -A new innovation in the MMM system that integrates [MMM] into the Blockchain smart contract technology that runs for 9 months, now launched on June 1, 2019."

"[I]magine a country that had no functioning economic system and a massive black market. As the Berlin Wall collapsed, so did the economic hallucination that was the centrally planned economy. The Chicago School of Economics group advised then-President Mikhail Gorbachev on a "shock therapy" approach to transition, leading to an unprecedented distribution of state assets (e.g., factories, buildings, natural resources) to people who could not tell the difference between a stock certificate and a stamp. Let's just say China did better with the gradual approach."

"Into this context came the ads. They feature a Russian man, Lenya Golubkov, who "invests" his money with a "securities cooperative" called MMM. His fortunes soon improve. He is able to buy boots, then a coat for his wife, eventually touring America with his brother and starting a successful business. The securities he buys look like stock certificates, promising returns of 100% per month and more."

"You must understand that everything on TV carried authority in those times. Like movies from the U.S. that hinted at Western opulence and the promise of new wealth associated with liberalization, MMM was sold as a dream to regular people in a language they understood. I imagine in many poorer, less-educated parts of the world, such storytelling still works. As does this image of a voucher for a share in a pyramid scheme."

"The man behind the scheme, Sergei Mavrodi, is a cartoon villain, dead at the age of 62 from a heart attack (who knows what that means in Russia now). He spent his life openly gaslighting regulators and politicians, briefly even becoming one to get immunity from prosecution. The people he was defrauding voted him in, but he ended up jailed anyway. Seemingly a brilliant mathematician and deeply cynical, Mavrodi wrapped the popular sentiments on the ground into a misleading trap for the unwary consumer."

"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 10 million people lost their savings. According to contemporary Western press reports, most investors were aware of the fraudulent nature of the scheme, but still hoped to profit from it by withdrawing money before it collapsed."

"In 2011, MMM re-opened as "MMM Global"." "It feels like a long time since the 1990s. But in terms of human nature it has been barely a blink. After Mavrodi got out of jail, MMM resurfaced in 2011, made its way to the internet and has now implanted itself into the body of cryptocurrency. Mavrodi is dead, but his scheme is the decentralized autonomous organization that nobody wanted, living on in the code forever. Like a tapeworm, it eats 10% of Ethereum's transactions and is responsible for 50% of the transfers for stablecoin Paxos, according to Coin Metrics."

"Interestingly, the third-highest gas-guzzler on Ethereum is another multi-level marketing scheme known as MMM Global, which has accrued over $5 million in ill-gotten Paxos (PAX) stablecoins."

"Let me introduce you to MMM, a pyramid scheme with roots in the former Soviet Union, which stole from nearly 10 million people during the 1990s. While decentralized finance and digital asset companies bend over backwards to be customer-centric and reform financial services (each in their own way), MMM is a pretender. It is a pretender that has stolen the language of the crypto economy to create a cancer in its body. It hides in the Paxos project and uses Ethereum for its 21st century machinations."

"But on-chain data shows that the two most active accounts on Paxos are linked to MMM BSC, a ponzi scheme which underwent exponential growth in activity this past year."

"MMM was the largest ever Ponzi scheme in Russia in ‘92-94, 10 million participants, 50 commited suicide after collapse of the scheme. The founder went to jail and then started a few more MMM projects globally, crypto-based. Amazing"

"PAX transfers involving the alleged crypto ponzi MMM BSC, an offshoot of the MMM Global scheme launched by Sergei Mavrodi in 2011, peaked at almost 16,000 transactions in late May. This problem isn’t a PAX-specific one, however, as 80% of USDT issued on the Tron blockchain (which is just a sliver of outstanding Tether volume) is tied to ponzi scheme payouts, according to the report."

"As for who or what is buying the PAX for the ponzi, Coin Metrics did not elaborate. But putting PAX in context with other stablecoins, the report notes that roughly 50% of PAX holders own some 80% of its outstanding supply."

Despite the presence of gas-guzzling Ponzi schemes on Ethereum, Castonguay, who works in blockchain gaming, doesn’t expect such scams to disappear any time soon. He said it was unfortunate that Ethereum was used in this way, but added:

“It's inevitable due to the unstoppable and permissionless nature of the technology. I suspect that even with strong regulation, Ponzi schemes on Ethereum will still be common, especially as privacy tools available on Ethereum get better,” he said.

Explore This Case Further On Our Wiki

MMM BSC was a blockchain-based multi-level marketing scheme launched in June 2019 which promised investors substantial returns and operated primarily using the Paxos stablecoin. At it's peak, it was responsible for more than 80% of all Paxos transaction volume. The scheme started to become more widely exposed in June 2020, and collapsed around the end of July 2020.

Philippines' SEC just denounced the top Ethereum dapp as a Ponzi - Decrypt (Dec 28)
Almost half of all PAX stablecoin transfers linked to ponzi: report - Decrypt (Oct 27)
@coinmetrics Twitter (Oct 27)
Coin Metrics' State of the Network: Issue 54 - Analyzing Stablecoin Supply and Activity Distribution  (Oct 27)
Lex Sokolin: Weed Out the Ponzi Scheme Eating Ethereum - CoinDesk (Oct 27)
Mmmbsc1 - Facebook (Oct 27)
Sergei Mavrodi - Wikipedia (Oct 27)
MMM (Ponzi scheme company) - Wikipedia (Oct 27)
MMM Global - Wikipedia (Oct 27)
MMM and bitcoin: Russian Ponzi mastermind Sergei Mavrodi is dead, but his legacy lives on in crypto (Oct 27)
Ethereum 2.0 Latest Update | MMM BSC FAILURE | Cryptocurrency News | Arsh Warwal - YouTube (Oct 27)

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