MMM launches campaign to boost embattled scheme
MMM Lesotho ‘managers’ yesterday embarked on a countrywide campaign aimed at boosting the embattled and controversial investment scheme.
MMM, which the authorities have condemned due to its unsustainable returns of 30 percent a month, has been facing challenges over recent weeks as ‘investors’ had become skeptical about its operations.
This jittery came after the scheme suddenly deactivated some of its operations in May this year when fearful members had attempted to withdraw money from the system following weeks of negative publicity.
The collapse of MMM’s BitCoin “experiment” in April this year after it failed to pay out clients their promised 100 percent returns added to investors’ jitters, leading to the deactivation.
Sergey Mavrodi—a Russian fraudster convicted of running one of that country’s biggest pyramid schemes in the 1990s and was jailed four-and-a-half years for the scam—is behind MMM and despite repeated warnings of possible loss of their savings, the scheme had been widely supported in South Africa and Lesotho until Bitcoin’s collapse.
But in an effort to reassure Basotho of MMM’s security, the ‘managers’ or ‘guiders’ yesterday held a presentation at Sefika Hall in Maseru which was attended by a crowd of about 200 people.
One of the ‘guiders’ was ‘Mamolemo Sekata, who said the campaign was to demonstrate how using “bitcoins” would lead to the revival of the beleaguered scheme.
The ‘managers’ would soon visit various districts of the country to meet with more of MMM’s increasingly nervous members, Ms Sekata said.
MMM supporters have always defended the scheme, insisting it is not a Ponzi scheme but a community stockvel which provides aid to its members. Suspending withdrawals, they argued, was one way of protecting the scheme, and so was using “bitcoins” in their transactions.
“We are now encouraging people to trade in bitcoins which will help them access their money quickly. At today’s meeting, we demonstrated how this digital currency operates and how it enables users to access their old mavros (money in their MMM accounts),” Ms Sekata said.
“We still encourage people to deposit for other members in order to be eligible for the 30 percent growth each month, but the advantage with using a bitcoin account is that you will not be forced to use a regular bank account.
“Applying for a bitcoin card which works like a credit or debit card gives access to Automated Teller Machine withdrawals as well as swiping for purchases. Members are encouraged to open an e-wallet account for trading in digital currency.”
Ms Sekata further said yesterday’s meeting also sought to set the record straight about MMM.
“It is not right that we have been wrongfully accused of operating a Ponzi scheme when we are, in fact, a community of people helping one another. Money is revolving around us and there is no central account to deposit into. That’s why it is wrong for people to accuse MMM founder Sergey Mavrodi of profiting from this scheme as we willingly deposit into each another’s accounts.
“The authorities have been saying for us to operate legally in this country we have to be registered but there are no laws in Lesotho compelling stockvels to register. So where else are we supposed to register?
“So by using bitcoins, government or banks will not succeed in stopping our stockvel. We are encouraging Basotho to trade using this digital currency to avoid banks freezing their monies.
“We are not afraid to promote bitcoin currency because there is nothing illegal about it,” she said.
Ms Sekata said the system would still allow for people to deposit money and have them wait “for a while” before their orders are out.
“During this period when efforts to revive the system are underway, members will still have to deposit and 10 percent of that money will be channeled towards the frozen mavros. Using bitcoins instead of regular money is just a better way to transact over the banking system,” she said.
Ms Sekata however said MMM members were still at the risk of having their money frozen by banks when they try to convert their bitcoins into money that is then deposited into their bank accounts.
“In the event that members convert their bitcoin into regular currency and deposit it into their bank accounts, they may still have to face banks about explaining the funds. Many banks have that policy of freezing accounts and there is nothing we can do about it,” she explained.
“But when one owns a bitcoin card, they can do many things internationally without having to rely on regular currency.”
Another ‘guider’, ‘Mathabiso Maqache said the campaign also sought to motivate members to continue believing in MMM.
“We have been concerned about our members failing to access funds they would have generated through the system and have decided to share this good news with them,” she said.
“On 23 July, we will hold a meeting in Mafeteng, and on 30 July, we will be in Leribe. The weekend following that we will be making presentations in Thaba-Tseka”, she said.
Meanwhile, yesterday’s presentation met with mixed feelings with some of the attendants saying they were still willing to participate but with small amounts while others remarked that it was going to take them time trust the system again.