What is Pyramid scheme, Ponzi Scheme? Pirimid scheme : - It's Money circulation, each recommending other investors. Ponzy scheme (Charles Ponzi fist orchestrated, generates returns for older investors by acquiring new investors). Both there is no any goods or service exchange happening which is banned in India and many other country. Many such company use proven MLM marketing models like Binary, Sunflower or any such. Is Pyramid/Ponzi scheme legal ? No, As there is no goods and service exchange, it's not legal in India. Major problem in this is there is no morality exist in such scheme, any time company can be closed. There are still some companies operating by registering in countries like Thailand where it's not made illegal. In India it's made illegal by 1978 Prinze Chits Money circulation Schemes(Banning) Act. Why people join such company? Unlike in MLM everyone can still earn money without any referral, people consider this as investment rather busin