{
  "id": 5557810,
  "title": "ST Explains: What are pyramid schemes and how are they dealt with in Singapore and China?",
  "url": "https://urgent.news/2026/09/04/st-explains-what-are-pyramid-schemes-and-how-are-they-dealt-with-in",
  "topic": "finance",
  "section": "Finance & Markets",
  "published": "2026-09-04T12:50:00.000Z",
  "source": {
    "name": "Straits Times",
    "slug": "straits-times",
    "url": "https://www.straitstimes.com/singapore/st-explains-what-are-pyramid-schemes-and-how-are-they-dealt-with-in-singapore-and-china"
  },
  "original_language": "en",
  "account": "Pyramid schemes involve a structure where early participants make money by recruiting more people, promising that the initial investment will be paid back multiple times for every new recruit. These schemes are banned in both Singapore and China due to their high risk of financial loss for participants. In Singapore, the Multi-level Marketing and Pyramid Selling (Prohibition) Act prohibits such schemes, while in China, they are illegal and come with severe penalties.\n\nIn Singapore, promoting or participating in an illegal MLM scheme can lead to fines up to S$200,000 and a jail term of up to five years. The Ministry of Trade and Industry warns that individuals who engage in such activities are seen as playing a destructive role in attracting others. The most infamous case in Singapore is the defunct Sunshine Empire, which cheated over 20,000 Singaporeans out of $180 million.\n\nIn China, authorities have cracked down on pyramid schemes, particularly the \"1040 Sunshine Project,\" which has been operating since 1998. The scheme operates under a \"five-level, three-promotion\" structure, with participants paying an upfront investment fee of 69,800 yuan in hopes of earning up to 10.4 million yuan later. Chinese media has reported that pyramid networks often operate covertly, using small teams and often resorting to brainwashing methods such as group activities and lectures. Authorities acknowledge that pyramid schemes have become more difficult to detect due to their evolution into online operations using digital tools.",
  "summary": "Pyramid selling is illegal in Singapore, carrying a maximum penalty of a S$200,000 fine and five years in jail.",
  "key_points": [
    "Pyramid schemes promise multiple returns for each new recruit",
    "Singapore's Multi-level Marketing and Pyramid Selling Act bans them",
    "Chinese authorities impose severe penalties for pyramid schemes"
  ],
  "editors_take": null,
  "illustration": null,
  "coverage": {
    "outlets": 1,
    "also_reported_by": []
  },
  "ai_generated": true,
  "disclaimer": "Summaries, key points and the editor’s take are written by software from other outlets’ reporting and may contain errors — always check the linked original."
}