Pyramid Scheme

A pyramid scheme is a business model that recruits members primarily to earn money from new recruits’ entry fees or investments, rather than from selling legitimate products or services. Participants at the top benefit as they recruit others beneath them, who then pay to join and also recruit further members. This structure resembles a pyramid, with a small initial group expanding downward. Pyramid schemes are unsustainable and illegal in many jurisdictions because they rely on perpetual recruitment to generate income, often leading to financial losses for most participants when recruitment slows.