Ponzi scheme mainly uses pulling investment as an excuse to defraud the money of latecomers. Named after a scam played by Italian speculators. However, although pyramid selling sometimes sells goods, it is also a "Ponzi scheme" in essence, and it is also a routine aimed at defrauding latecomers of funds. MLM is clearly defined in Articles 2 and 7 of the Regulations on Prohibiting MLM in People's Republic of China (PRC). Please refer to the MLM Prohibition Ordinance for details.

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Charles Ponzi was an Italian-born speculator who lived in the 20th century. 1903 immigrated to the United States. 19 19, he began to plot. The swindler invested in a non-existent enterprise, promising investors a 40% profit return within three months, and then, due to the generous returns of previous investors, Ponzi successfully attracted 30,000 investors within seven months. This conspiracy lasted for a year, and only those who were carried away by interests woke up, and later people called it "Ponzi scheme".

References:

Baidu encyclopedia-Ponzi scheme