This week the price of bitcoin reached close to $500, a price hike that hasn't been seen in over a year. Apparently, the reason for the hike is due to a pyramid scheme called MMM founded by former Russian parliamentarian (and previously incarcerated felon) Sergey Mavrodi. As financial institutions continue adopting the underlying technology that the bitcoin currency operates on, the blockchain, the reputation of bitcoin itself is may be losing its charm. It is yet to be determined if these stories will be the tipping point for bitcoin based startups.
New members of MMM have to buy bitcoins to join the scheme, which is the brainchild of Sergey Mavrodi, a former Russian parliamentarian since jailed for fraud. The bitcoins are sent to other members of the network as “mutual aid”. Participants are promised a 30 per cent return per month, with bonuses for referrals or posting testimonials online.