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Russian Fraudster Lures Thousands in Kenyan Pyramid Scheme with a Bitcoin Twist

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For the past year, Kenyans have been lured with the promise of making money quickly through a pyramid scheme started by convicted Russian fraudster, Sergey Mavrodi, reports the Daily Nation, a Kenyan news site.

Mavrodi is reported to have designed a major pyramid scheme in Russia before its end came in 1997, which is believed to have conned an estimated $100 million out of its members. He was later sentenced to four and a half years in prison in 2007 for defrauding 10,000 investors of around $4.3 million. This is the same man who set up MMM Global giving promises to Kenyans interested in the latest MMM Kenya pyramid scheme that they would receive up to 100 percent returns.

mavrodi

Sergey Mavrodi

As part of the scheme, members are informed that if they donate money to the needy they will be rewarded, earning points in the digital currency, bitcoin. Not only that, but for people who want financial freedom, they are promised this as well as an opportunity to ‘change the world.’

The idea behind this scheme is that you give to the network and in turn wait for others to give back to you. It is portrayed that the more you give, the more you receive.

Mavrodi is reported to have said on his website that:

This is not a pyramid scheme, not a bank or an online business.

Warning the Public

It’s reported by the Daily Nation, that the Central Bank of Kenya (CBK) warned the public; however, they didn’t refer specifically to MMM. Instead, they said that digital currencies such as bitcoin are not legal in Kenya and have no protection attached to them if they should fail.

It said:

Transactions in virtual currencies such as bitcoins are largely untraceable and anonymous, making them susceptible to abuse by criminals in money laundering and financing of terrorism.

How the Scheme Works

Once an individual joins MMM, they are asked to donate not less than $10 before they can then ask others in the chain for help.

After a donation has been made an individual is promised to receive 30 percent of the amount they donate.

The more people who join the more bonuses a person can get through points called Mavros.

MMM Under Investigation

Unfortunately, this isn’t the first, nor will it be the last, time that Mavrodi has initiated these types of Ponzi schemes designed to make money off the backs of vulnerable people.

In April 2016, MMM Global’s franchises, Republic of Bitcoin, was shut down while MMM South Africa is alleged to be under criminal investigations by the National Consumer Commission. MMM Zimbabwe has already fallen after the number of those in need outnumbered those joining.

Images from Shutterstock and Wikipedia.

Important: Never invest (trade with) money you can't afford to comfortably lose. Always do your own research and due diligence before placing a trade. Read our Terms & Conditions here. Trade recommendations and analysis are written by our analysts which might have different opinions. Read my 6 Golden Steps to Financial Freedom here. Best regards, Jonas Borchgrevink.

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Bitcoin Price Resumes Slide as Volumes Dip, China Tariffs Weigh on Bitmain

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Bitcoin’s price declined on Friday, as tepid trade volumes kept the bulls in check following a stalled recovery attempt earlier in the week. On the news front, President Trump’s massive import duties on Chinese goods is beginning to take its toll on Bitmain, the nation’s largest mining harder manufacturer.

BTC/USD Update

After holding above $6,500 for most of the week, bitcoin’s price fell 1.3% on Friday to $6,452. Over the last 24 hours, BTC fluctuated between $6,549 and $6,450, according to CoinMarketCap.

The bitcoin price was still trading at a hefty premium on Bitfinex following an early-week implosion of Tether, a controversial stablecoin that lost its peg to the U.S. dollar. On Bitfinex, BTC/USD is trading around $6,578.

Bitcoin’s trade volume has declined sharply throughout the week. Over the last 24 hours, BTC turnover on virtual currency exchanges amounted to $3.8 billion. BitMEX, a popular derivatives platform, continues to be the largest market for BTC trades.

Even with the slump, bitcoin’s share of the overall cryptocurrency market capitalization remained close to 54%. Bitcoin’s dominance rate has increased in recent weeks as altcoins and tokens failed to make traction. At current prices, bitcoin has an overall capitalization of $111.9 billion. At the time of writing, the combined market cap of all digital assets was $207.5 billion. More than $11 billion in daily volumes were recorded for all assets combined.

Tariff War Takes Its Toll

The Trump administration’s imposed tariff war on Chinese producers is beginning to affect the nation’s bitcoin mining manufacturers. As the South China Morning Post recently reported, Bitmain has been dealing with new tariffs since Aug. 23. Two months prior, the company’s Antminer S9 product was reclassified by the U.S. Trade Representative as “electrical machinery apparatus,” which makes it subject to new taxes.

The import duties will exacerbate an already harsher outlook for the blockchain conglomerate. Bitmain has seen a sharp drop in mining rig demand caused by the yearlong slump in cryptocurrency prices. As a result, analysts foresee sizable losses in the company’s second-quarter earnings report.

Bitmain isn’t the only China-based blockchain company feeling the pinch of a new tariff war. Canaan and Ebang – China’s other major bitcoin mining manufacturers – could see a decline in shipments and profitability in the coming months. All three companies have announced plans to issue an initial public offering (IPO) in the not-too-distant future.

President Trump has imposed tariffs on more than $250 billion of Chinese goods. While Beijing has responded with countermeasures of its own, it will not be able to match the U.S. dollar-for-dollar given its large surplus with the country.

On Friday, the Chinese government reported annual GDP growth of 6.5% in the third quarter, the slowest since 2009.

Disclaimer: The author owns bitcoin, Ethereum and other cryptocurrencies. He holds investment positions in the coins, but does not engage in short-term or day-trading.

Featured image courtesy of Shutterstock.

Important: Never invest (trade with) money you can't afford to comfortably lose. Always do your own research and due diligence before placing a trade. Read our Terms & Conditions here. Trade recommendations and analysis are written by our analysts which might have different opinions. Read my 6 Golden Steps to Financial Freedom here. Best regards, Jonas Borchgrevink.

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4.6 stars on average, based on 647 rated postsSam Bourgi is Chief Editor to Hacked.com, where he specializes in cryptocurrency, economics and the broader financial markets. Sam has nearly eight years of progressive experience as an analyst, writer and financial market commentator where he has contributed to the world's foremost newscasts.




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Crypto Update: Coins Extend Losses as Bulls Fail to Show Up

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While the major cryptocurrencies haven’t been able to gain ground following Monday’s Tether-induced turmoil, the market has been stable in the past few days, and the top coins managed to hold up above their short-term support levels.

After yesterday’s slightly bearish session, overnight, Bitcoin, Ethereum, and Ripple all drifted the narrow ranges that developed during the week, and most of the smaller coins also turned lower, even as volatility remains relatively low.

The total value of the market dropped to $207 billion, but it’s still well above the bear market low, and the segment avoided a major technical breakdown that was looming after last week’s selloff. That said, the long-term picture is still bearish in the case of most of the majors, and our trend model is also on sell signals across the board from a short-term perspective.

On another negative note, Ripple and Stellar also joined the decline yesterday after showing strength this week, and the segment is still missing a bullish leadership.


BTC/USD, 4-Hour Chart Analysis

While Bitcoin dropped below the very narrow post-spike trading range, it continues to trade above the primary support level near $6275, and well above the lows from last week. We maintain our short-term sell signal on the coin, as it failed to recapture the $6500 level, and although the long-term signal is still neutral for BTC traders still shouldn’t enter positions here.

Further resistance levels are ahead near $6750 and $7000, while above the key long-term support zone near $5850, a weaker level is also found near $6000 and the next major zone is between $5000 and $5100.

Ethereum Dips Below $200 as Ripple Tests Long-Term Zone Again

XRP/USD, 4-Hour Chart Analysis

As Ripple’s relative strength faded, the third largest coin quickly gave back most of Monday’s gains, and now it trades right at the key long-term support/resistance zone between $0.42 and $0.46 zone. The lack of bullish follow-through is a negative sign for the whole segment and it gave another confirmation of the still apparent selling pressure on the majors.

With that in mind, traders still shouldn’t enter positions here, even as XRP remains above the recent triangle consolidation pattern, with strong resistance ahead at $0.51, $0.54, $0.57, and with further resistance zones found near $0.375 and $0.35.

 

ETH/USD, 4-Hour Chart Analysis

Ethereum showed no sign of relative strength this week, and the coin is back below the $200, although the decline also lacked momentum so far. The second largest digital currency is clearly above the next strong support level at $180, with further levels just below that near $170 and $160.

ETH remains on sell signals on both time-frames given the dominant broader declining trend and the short-term weakness, and odds still favor the test of the bear market low in the coming weeks, with strong resistance levels still ahead at $235 and $260.

IOTA/USD, 4-Hour Chart Analysis

Most of the smaller altcoins are also under clear selling pressure, with the likes of Monero, IOTA, EOS, and NEO all drifting lower in the past couple of days. Litecoin also followed the broader market lower so far today, and the coin is already testing the key $51 level, as we expected after showing weakness earlier on this week. A move below primary support would warn of a test of the bear market low near $47 with the next major zone found at $44.

LTC/USD, 4-Hour Chart Analysis

With that in mind, traders and investors should stay away from the coin until at least s short-term trend change, with strong resistance levels ahead near $56, $59, and $64.

Featured image from Shutterstock

Disclaimer:  The analyst owns cryptocurrencies. He holds investment positions in the coins, but doesn’t engage in short-term or day-trading, nor does he hold short positions on any of the coins.

Important: Never invest (trade with) money you can't afford to comfortably lose. Always do your own research and due diligence before placing a trade. Read our Terms & Conditions here. Trade recommendations and analysis are written by our analysts which might have different opinions. Read my 6 Golden Steps to Financial Freedom here. Best regards, Jonas Borchgrevink.

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4.6 stars on average, based on 379 rated postsTrader and financial analyst, with 10 years of experience in the field. An expert in technical analysis and risk management, but also an avid practitioner of value investment and passive strategies, with a passion towards anything that is connected to the market.




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Bitcoin Price Resumes Holding Pattern as Futures Trading Soars

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The bitcoin price remained locked in a sideways pattern on Thursday, as virtual exchange volumes continued to retreat following a sharp early-week spike. However, a new report from the Chicago Mercantile Exchange (CME) confirmed a sharp increase in trading in bitcoin futures contracts, a sign that institutional investors were flocking to the asset.

BTC/USD Update

Bitcoin’s price is currently averaging $6,543 on major exchanges, according to CoinMarketCap. The leading digital currency continues to trade at a premium on Bitfinex, where prices hover around $6,720. In both cases, BTC is virtually unchanged compared with 24 hours ago.

The digital currency market has experienced very little change over the past three days as trade volumes continued to dry up following an unexpected upsurge on Monday. Bitcoin’s trade volumes are back down below $4 billion,

BTC is up nearly 4% this week, having adding more than $4 billion to its market cap. The digital currency is currently valued at $113.4 billion for a 53.7% share of the overall market.

The crypto market cap was valued at $211.1 billion on Thursday. Trading volumes across all major assets averaged $11.6 billion compared with 24 hours ago.

Bitcoin Futures Volumes on the Rise

Institutional interest in bitcoin appears to be on the rise, according to the latest trading data published by CME Group. Trading in CME bitcoin futures contracts jumped 41% in the third quarter, with the total number of open contracts increasing 19%.

Bitcoin futures contracts have recorded an average daily trade volume of 2,582 this year, with open interest reaching 2,696 contracts. Volumes appear to have spiked throughout the month of September, reaching a high of 5,881 contracts on Sept. 21.

The following chart, courtesy of CME, provides an overview of bitcoin futures volume based on notional value traded and open interest.

Bitcoin futures appear to have had a stabilizing effect on the market, a contrary view to the one proposed by the San Francisco Federal Reserve, which argued that securitization induced more volatility. Volatility in bitcoin’s spot price has been declining all year long, having recently touched new 17-month lows.

Over the past 30 days, bitcoin’s price volatility has averaged less than 2%, according to bitvol.info. The website’s volatility tracker reads 2.91% over the last 120 days and 3.82% over a 252-day window.

The CME futures contract expires at the end of the month. The contract offered by CBOE closes toward the middle of the month.

Disclaimer: The author owns bitcoin, Ethereum and other cryptocurrencies. He holds investment positions in the coins, but does not engage in short-term or day-trading.

Featured image courtesy of Shutterstock.

Important: Never invest (trade with) money you can't afford to comfortably lose. Always do your own research and due diligence before placing a trade. Read our Terms & Conditions here. Trade recommendations and analysis are written by our analysts which might have different opinions. Read my 6 Golden Steps to Financial Freedom here. Best regards, Jonas Borchgrevink.

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4.6 stars on average, based on 647 rated postsSam Bourgi is Chief Editor to Hacked.com, where he specializes in cryptocurrency, economics and the broader financial markets. Sam has nearly eight years of progressive experience as an analyst, writer and financial market commentator where he has contributed to the world's foremost newscasts.




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