ONLINE DONATION EXCHANGES OR STOKVELS
The key to all of these systems is the maths. If you think about how quickly the money must multiply then you understand that donations exchanges or online stokvels simply cannot work.
These creations, often by the same people over and over, are not built to last. The owners know and understand exactly how these platforms work. Very little money is spent on the back offices or websites as would normally be done by a legitimate network marketing company.
The promoters of these platforms all use the same modus operandi and the same “sales pitch” to recruit their victims. Yes the recruits will become victims. Greed drives the behaviour of the recruiters, commissions mostly, as the desperate need for money without actually working is what drives those who sign up.
Notoriously DEFENCEX, created by Chris Walker was the first online Ponzi dream maker in South Africa.
Donation exchanges in Africa and more specifically in South Africa are a result of the Guider training in MMM. Kipi was the first donation exchange to hit our shores, however MMM was the one that launched the most creative white collar criminals in online marketing. This training and the failure of MMM started a Cancer in the community of people who had benefited early on from MMM and who saw the weaknesses in the system. The history of MMM can be found here
Once MMM had collapsed in South Africa after approximately 9 months, many guiders and members took to creating numerous other platforms i.e. PIPCOIN, GPX, ZEWANG, CASHGANG, FREEDOM GLOBAL, MLC247, GREATMINDS, RICHMINDS, MLN, FORTUNE DESTINY, NEW TREND NETWORK, BTC RETURNS, BTCR BOOST, BTCFOREVERCLUB, PGW, PEC, RICH SOCIETY, CRYPTO BUILDER, ZARFUND, BUMBANO, CRYPTOGENX, PLANET MATRIX, BTC MONEY EXCHANGER, THE CRYPTO BANKER, … the list goes on and on. 99% of the have failed and the other 1% have just been launched.
These platforms are Ponzi schemes in a slightly different manner. The are peer to peer systems, however one or two of them are running central accounts being used to assist the queue (aka the long list of people waiting for a donation to be made to them).
One of the most important things to remember in these systems is that it is not about the multiplication of members, it is all about the multiplication of MONEY. Huge amounts of people with small donations only are no indication that the system is successful!
MOST IMPORTANTLY DESPITE ALL THE “LEGALITIES” QUOTED ON THE VARIOUS WEBSITES, WE HAVE LAWS PROHIBITING PARTICIPATION IN THESE SCHEMES HERE IN SOUTH AFRICA. THE USE OF BITCOIN BY THE MORE INVENTIVE OWNERS DOES NOT PRECLUDE THEM FROM KNOWINGLY BREAKING THE LAW.
Here is a recent article published on Moneyweb regarding Investors in some illegal schemes getting money back.