Legal analysis: It refers to the form of online MLM that uses the principle of direct sales multiplication to use rolling or static capital circulation to repair the other, and use the money from new members to pay to previous members. The essence is a pyramid-style MLM fraud.

It is extremely covert, deceptive and socially harmful.

Funding does not refer to publicly offered public and private equity funds, but refers to a model that compiles various stories of extremely high rates of return to deceive people's greed for money and conduct underground fundraising.

Legal basis: Article 224 of the Criminal Law of the People's Republic of China and the People's Republic of China: In the name of promoting goods, providing services and other business activities, organizations and leaders require participants to pay fees or purchase goods or services to obtain membership.

Qualifications, and organize hierarchies in a certain order, directly or indirectly use the number of development personnel as the basis for compensation or rebates, induce or coerce participants to continue to develop pyramid selling activities for others to participate in, defraud property, and disrupt economic and social order, shall be sentenced to a fixed term of not more than five years.

Imprisonment or criminal detention and a fine; if the circumstances are serious, the offender shall be sentenced to fixed-term imprisonment of not less than five years and shall also be fined.