Legal analysis: Any pyramid scheme is prohibited by national laws and regulations. Whoever lures or coerces participants to continue to develop others to participate in pyramid schemes, defrauds property and undermines economic and social order, shall be sentenced to fixed-term imprisonment of not more than five years or criminal detention and shall also be fined; If the circumstances are especially serious, he shall be sentenced to fixed-term imprisonment of not less than three years but not more than seven years and shall also be fined. Generally speaking, ordinary people who participate in pyramid schemes are not treated as illegal business operations. This crime only targets leaders and key members. In the name of selling goods, providing services and other business activities, the organization and leaders require participants to obtain the qualification to join by paying fees or purchasing goods and services, and form a hierarchy in a certain order, directly or indirectly taking the number of development personnel as the basis for remuneration or rebate.

Legal basis: Article 224 of the Criminal Law of People's Republic of China (PRC) organizes and leads anyone who, in the name of selling goods or providing services, asks participants to pay fees or purchase goods or services to obtain membership, forms a hierarchy in a certain order, and directly or indirectly lures or coerces participants to continue developing pyramid schemes that others participate in, defrauding property and disrupting economic and social order, based on the number of people who have developed. If the circumstances are serious, he shall be sentenced to fixed-term imprisonment of not less than five years and fined.