According to the Opinions of the State Administration for Industry and Commerce, the Ministry of Public Security and the People's Bank of China on Cracking Down on Illegal Business Activities such as MLM and disguised pyramid schemes, the characteristics of pyramid schemes or disguised pyramid schemes are as follows.

1, operators engage in store-free business activities through developing personnel and organizing networks, and participants get remuneration from offline marketing performance;

2. Participants get the qualification to join, introduce or develop others' participation by paying the membership fee or paying the membership fee in disguised form by subscribing for goods (including services, the same below), and get the reward;

3. The first participant benefits from the fees paid by the developed offline members, and the amount of benefits is determined by the order in which they join;

4. The organizer's income mainly comes from the entry fees paid by participants or the fees paid in disguised form by subscribing for goods;

5. The organizer pays the remuneration of the earlier participants with part of the fees paid by the later participants to maintain the operation;

6. Others recruit people to engage in pyramid schemes in disguise by developing personnel, organizing networks or taking high returns as bait.