Canada’s Competition Bureau puts the distinction in ordinary language. A multi-level marketing (MLM) plan can be a lawful way to sell real goods or services: participants earn mainly by supplying product to other participants or to end customers. A pyramid-selling scheme is a criminal offence: the money is made primarily by recruiting people who pay to join, even if a low-value “product” is waved around as decoration.
Under the Competition Act, an MLM crosses into pyramid territory when it pays for recruitment itself, demands purchases beyond a cost-price starter kit, loads inventory that cannot reasonably be sold or used, or refuses a fair buy-back. Income claims must also be fair, reasonable and timely — typical earnings, not a top earner’s fantasy screenshot.
Other countries use different statutes, but the economic test travels well. If the presentation is mostly about building a downline and the goods are an afterthought, walk away. Crypto tokens bolted onto the same recruitment tree do not make the maths healthier.
If an “opportunity” already cost you inventory fees or joining payments, use Get help. For paid recovery pitches afterward, see Fake recovery.
This article is for general information only. It is not legal or financial advice. Details change. If you have lost money, contact your bank or card issuer and use the routes on the help pages.