Article 224- 1 of the Criminal Law (revised according to the seventh amendment to the Criminal Law): Organize and lead pyramid selling activities in the name of selling goods and providing services, requiring participants to obtain the qualification to join by paying fees or purchasing goods and services, forming a hierarchy in a certain order, and directly or indirectly taking the number of people who have developed as the basis for remuneration or rebate, inducing and coercing participants to continue to develop others to participate, defrauding property and disrupting economic and social order.
Article 7 of the MLM Regulations on Prohibiting MLM belongs to MLM:
(1) The organizer or operator, through the development of personnel, requires the developed personnel to develop other personnel to join, and calculates and pays remuneration (including material rewards and other economic benefits, the same below) to the developed personnel based on the number of personnel directly or indirectly developed, so as to seek illegal benefits;
(2) The organizer or business operator, through the development personnel, requires the developed personnel to pay the fees or pay the fees in disguised form by subscribing for commodities, etc. , so as to obtain the qualification to join or develop other personnel to join and seek illegal interests;
(3) The organizer or business operator requires the developed personnel to develop other personnel to join, thus forming an online relationship, and calculating and paying online rewards according to the sales performance of offline personnel to seek illegal benefits.
In the MLM Prohibition Ordinance, the concept of hierarchical relationship has been repeatedly mentioned. The formation of hierarchical relations according to certain laws is only a phenomenon in many pyramid schemes, and it is only possible to be suspected of pyramid schemes if it is related to illegal possession of other people's property.