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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.

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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.’

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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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Altcoins

Bitcoin, Ethereum Lead Cryptocurrency Market Lower as Trade Volumes Plunge to Six-Week Lows

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Cryptocurrencies continued lower on Sunday after a stalled recovery limited gains to the low single digits, as weak trading volumes kept prices locked in a downtrend.

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Crypto Market Price Update

Digital currency prices were down across the board Sunday, with bitcoin and Ethereum leading the declines.

Bitcoin bottomed at $7,243.90, its lowest since April 11. BTC values recovered at $7,348, having lost more than 2% over the past 24 hours. The world’s largest cryptocurrency has lost more than $17 billion in market cap compared with last week.

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Ether prices bottomed at $562.23 over the weekend, giving back more than $200 from its most recent high three weeks ago. Ethereum is down nearly 20% in value over the past seven days. It was last seen trading around $569.63.

Bitcoin cash dipped below $1,000 after climbing back above the psychological threshold on Friday. At last check, it was valued at $995.88.

Stellar Lumens was down more than 5% to $0.276.

The crypto market cap is down more than $10 billion over the past 24 hours with total coin values hovering north of $326 billion. The market bottomed at $320 billion on Thursday.

Trading volumes have declined sharply over the past five days, with the market turning over just $13.1 billion on Sunday. That was the lowest turnover in six weeks.

The Bullish Case for Bitcoin

The latest market drama is once again forcing investors to think long and hard about their existing crypto holdings. Though the altcoin universe offers plenty of stellar projects, the bullish case for bitcoin remains stronger than ever, especially at current price levels. That’s because a growing number of use cases and increased institutional adoption make BTC an attractive long-term hold.

Though some have speculated that institutionalizing bitcoin is responsible for its marked decline since December, wider adoption is a net positive for the digital currency. Institutions today are exploring ways to offer bitcoin to their clients and developing new custody platforms that are designed to make holdings more secure.

Another interesting tidbit: bitcoin’s fees on Saturday briefly fell below rival bitcoin cash. Data from fork.lol show that BTC’s transaction costs were  lower over a six-hour period, with the discount widening over a three-hour stretch.

By Sunday, the picture had reverted back to the norm with bitcoin transactions costing more than its rival.

Though it’s not entirely clear why bitcoin’s transaction costs declined so sharply on Saturday, the average tx fee for the world’s largest cryptocurrency is extremely erratic. The fee on bitcoin cash, on the other hand, is usually much more stable.

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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4.5 stars on average, based on 417 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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Blockchain

Justin Sun Plans To Buy BitTorrent

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Justin Sun, the CEO of TRON, is finalizing an agreement to buy BitTorrent, inc. Most people know BitTorrent as the creator of the popular torrenting client, uTorrent, which at its peak had over 100 million users.

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According to Torrentfreak.com, BitTorrent has been in a steady decline to some poor decisions and potentially illegal missteps by their management.

In an interview with BitTorrent founder Bram Cohen, the management was painted by Cohen as incompetent narcissists who had no business plan and no idea what they were doing besides chasing some nebulous idea of celebrity endorsement.

This can be seen in Cohen’s statement, “They were just incompetent fuckups. I mean they’re losers. Basically, Accel took their share in BitTorrent and pretty much just gave it away to these total strangers who they didn’t know. And not only gave away their stock but gave away control of the company.

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Human beings are a bunch of starfuckers, right? The United States has become this celebrity-obsessed culture, and everyone’s all about, oh, we’ll gain access. That’ll be great, and we’ll make money off of it, everybody thinks this.”

It is against this backdrop that Sun’s alleged acquisition is taking place. The TRON projects alleged goal is to “decentralize the web.” Owning one of the most recognizable brands aligned with these goals would be a major coup for the ambitious CEO.

This is due to the fact that the most likely use case of uTorrent by TRON would be to simply parlay its user base into usage of the TRON blockchain.

Since a huge part of TRON’s model relies on advanced content search for media files, simply making use of the uTorrent brand but integrating it with Tron’s decentralized search would instantly transform TRON into one of the most actively utilized blockchains on earth.

The information stems from the fact that BitTorrent changed their company name recently to Rainberry according to their chief product officer. “Rainberry Inc is the official name of the company; it was changed right around the start of 2017.” He stressed that it was a purely corporate decision and that none of the existing product brands would change.

Despite this blanket denial, it seems like the acquisition was proceeding swiftly, and was even overcoming some initial hurdles. BitTorrent had already tried to find a better acquisition offer during the first round of negotiations, to the point that Justin Sun took them to court in an attempt to stop them from negotiating with other buyers.

However, it seems that these initial roadblocks have been overcome, as a new company called Rainberry Acquisition, (BitTorrent recently changed their official company name to Rainberry) was formed and registered directly to Justin Sun. How Sun plans to integrate the platform with Tron is an open question, but it is likely to result in some interesting synergies.

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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Analysis

Long-Term Cryptocurrency Analysis: Correction Deepens but Leaders Remain Stable

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As the major cryptocurrencies got hit hard this week, losing around 20% on average, the long-term picture in the segment got close to an entry point for investors. The overbought readings that developed during the late-April rally are now cleared and although the short-term trends are still clearly negative, we still expect the coins to resume the recovery. With that in mind, long-term investors could start accumulating the relatively stronger coins.

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On a negative note, even the leaders violated key support levels during this week’s selloff, but the secular long-term trends are not yet in danger. The prior leaders Ethereum, EOS, and IOTA are still in the center of attention, as we expect them to form a bottom soon. Bitcoin and the other relatively weak coins, like Litecoin, Monero, Dash, and NEO are still lagging the form a technical perspective, but they are also well above the support levels that would indicate an end of the secular bull market.

BTC/USD, Daily Chart Analysis

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Bitcoin is below the key $7650-$7800 support level and it remains the biggest drag on the market, despite a brief period of relative strength this week. The upper boundary of the base pattern that we identified in April is found near $6150, with a weaker zone around $6500, and with the short-term trend clearly being negative, the latter might be tested before a bottom forms. Further resistance is ahead at $8400, $8700, and between $9000 and $9200, and traders and investors still shouldn’t enter positions here.

ETH/USD, Daily Chart Analysis

Ethereum is testing the $555-$575 support zone after violating the $625-$645 range, with the declining short-term pattern being intact. A bottom near the $500 would still keep the recovery intact, but the correction low might already be in, and investors could already add to their holdings here. Further resistance zones are ahead between $735 and $780 and near $845, while support is found near $450.

(more…)

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 257 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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