The story of Da Zui buying a black iron kitchen knife and joining the "Kitchen Knife Gate" in "Wulin Wai Zhuan" reveals the illegality and harm of pyramid schemes. The article analyzes the difference between pyramid schemes and legal sales, introduces the laws and regulations in China to combat pyramid schemes, and aims to raise public awareness and prevention of pyramid schemes.

1、 What is pyramid scheme

Pyramid selling is an illegal business activity that seeks illegal benefits through developing personnel, collecting entry fees, and forming hierarchical teams for remuneration. The "Regulations on the Prohibition of Pyramid Selling" clarify the definition and behavioral characteristics of pyramid selling, including requiring the development of personnel, payment of fees, and the formation of online and offline relationships. MLM is different from legitimate direct sales. Direct sales directly promote products to consumers, reduce intermediaries, and aim to sell products rather than attract customers. Pyramid selling activities often involve low-quality goods, with the true purpose of developing personnel to collect fees, seriously disrupting economic and social order.

2、 Legal sanctions against pyramid schemes

Elaborated on the legal sanctions for pyramid schemes. According to the Regulations on the Prohibition of Pyramid Selling and the Criminal Law of the People's Republic of China, pyramid selling activities are illegal, and organizers and leaders may face criminal responsibility. Article 224-1 of the Criminal Law stipulates criminal penalties for pyramid selling activities, including fixed-term imprisonment, detention, and fines. Article 70 of the "Provisions of the Supreme People's Procuratorate and the Ministry of Public Security on the Standards for Filing and Prosecution of Criminal Cases under the Jurisdiction of Public Security Organs (II)" specifies the standards for filing and prosecution, which means that those who organize or lead pyramid selling activities with more than 30 people and at least three levels should be filed and prosecuted. At the same time, it is pointed out that the criminal law mainly sanctions the leaders of pyramid schemes that pose the greatest social harm, rather than all those involved in pyramid schemes. The identification of organizers and leaders of pyramid schemes includes personnel responsible for initiating, planning, manipulating, managing, coordinating, promoting, and training pyramid schemes, as well as personnel who have been criminally prosecuted or administratively punished for organizing or leading pyramid schemes.

3、 Conclusion

In the Internet era, online pyramid selling is rampant, with hidden forms, coexisting with illegal fund-raising and financial fraud, and doing great harm. To resist new types of cybercrime, it is necessary to learn anti fraud knowledge, remain vigilant, and not easily believe temptations.