The price of the cryptocurrency bitcoin surged on Wednesday to its highest in more than a year amid a wave of Chinese testimonials for a “social financial network” called MMM, which bears the hallmarks of a pyramid scheme.

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.

“Today, on October 31, I received 20 per cent interest and [a bonus] as a recommender, for a total of $7,750. I truly experienced the greatness of 3M and the sincerity of all the participants,” said Wen Qiang, one of the hundreds of MMM evangelists taking to YouTube in the past 24 hours.

The bitcoin price surged by more than a fifth to above $490 on Wednesday, in the latest spike for the virtual currency created in 2008 by an anonymous mathematician.

Championed by technologists and libertarians for its lack of centralised control, bitcoin lost three-quarters of its value in 2014 after the failure of MT Gox, a prominent exchange. Despite its fringe reputation bankers have in recent months expressed mounting interest in the underlying technology known as blockchain.

MMM has elements typical of pyramid schemes, characterised by rewards for recruitment and the promise of outsize profits. The flawed economics of such schemes all but doom them to collapse.

MMM claims on its website that, as the scheme involves money transfers between private persons, it is entirely legal and breaks no laws.

The price of bitcoin has more than doubled in the past month, rising by a fifth alone on Wednesday, to value the stock of existing bitcoins at more than $7bn.

Mr Mavrodi was charged with fraud in Russia in 1997 after the collapse three years earlier of a pyramid scheme he operated, also called MMM. Tens of thousands of Russian citizens lost investments. A decade later he was found guilty of defrauding investors of Rbs110m ($1.7m).

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The Chinese scheme has been running for at least a year, but began to attract significant attention in the last month as the price of bitcoin rose.

On his website, Mr Mavrodi couples the investment case for MMM, which claims to operate in 60 countries, with a defiant stand against the established financial order. “This is a community of ordinary people, selflessly helping each other, a kind of the Global Fund of mutual aid,” his website reads. “The goal here is not the money. The goal is to destroy the world’s unjust financial system.”

Copycat social financial networks describing themselves as platforms for “helping each other” have also emerged in China in recent months. In 2013, Indian police arrested six officials, including three Russians, for operating an Indian version of the scheme, known locally as the Mavrodi Mondial Moneybox India.