A twenty-five bitcoin is arranged for a photograph in Tokyo, Japan.
Photograph by Tomohiro Ohsumi — Bloomberg/Getty Images
By Victor Luckerson
November 5, 2015

The price of the cryptocurrency Bitcoin has surged over the past month in part thanks to Chinese demand for what appears to be a Russian pyramid scheme. The Chinese have been posting testimonials about a “social financial network” called MMM, according to the Financial Times. Under the scheme, participants are required to buy bitcoins to join, then are promised a 30% return along with additional money for referrals.

The program was devised by Sergey Mavrodi, a former member of Russian parliament who was charged with fraud in Russia for allegedly running a pyramid scheme, the report says.

Bitcoin had been steadily gaining value over the last month, then saw its growth explode this week, spiking to a peak above $490 on Wednesday. By Thursday morning, the currency was back down below $400.

After a flurry of interest in 2013, bitcoin’s price collapsed following the failure of the MT Gox exchange in February 2014. The currency has yet to re-attain the highs reached in that period.

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