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.
In the name of selling goods, providing services, investing in projects and other business activities, organizations and leaders require participants to obtain the qualification to join by paying fees or purchasing goods, services and investments.
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. For example, village-level community stores have five or six grades of goods, all of which are normal sales. Therefore, the object of pyramid selling infringement is complex, and pyramid selling is often accompanied by tax evasion and price gouging. Infringe on multiple social relations and legal objects; There must be two main object elements: 1. Fraud (infringement of citizens' property ownership); 2. Disturbing social management order and economic order.