The following acts belong to pyramid schemes:

(1) The organizer or operator, through the development of personnel, asks the developed personnel to develop other personnel to join, and calculates and pays the 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, and seeks illegal benefits;

(2) the organizer or business operator, through the development of personnel, demands the developed personnel to pay fees or pays 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 benefits;

(3) The organizer or business operator, through the development of personnel, requests the developed personnel to develop other personnel to join, thus forming an up-and-down relationship, and calculating and paying the online remuneration based on the sales performance of the offline, so as to seek illegal benefits.

In the Regulations on Prohibiting MLM, the concept of hierarchical relationship is repeatedly mentioned. It is only a phenomenon in many pyramid schemes that hierarchical relationship is formed according to certain laws, and it is only possible to be suspected of pyramid schemes if it is related to illegal possession of other people's property.