# Is Avatar a Multi-Level-Marketing Scheme?
At least one observer has claimed that the popular cryptocurrency Avatar is a multi-level-marketing (MLM) scheme in which users generate significant rewards for every person they successfully refer. This has led to questions about the legitimacy and legality of the Avatar network.
## What Is Multil-Level-Marketing and How Does it Work?
Multi-level-marketing, also known as MLM, is a type of marketing strategy in which people are rewarded for referring new customers or other members to a company’s products or services. The reward system is based on a hierarchical structure, in which those who refer more members receive a greater reward than those who refer fewer members. This system can be used to generate a steady stream of income for the people involved.
## Is Avatar an MLM Scheme?
The Avatar network has denied any involvement in MLM schemes and has stated that their platform is not designed to incentivize people to refer others. They have also stated that they do not offer any bonuses or rewards for referrals and that their platform is designed solely to facilitate the transfer of funds between users.
While the Avatar network may not be an MLM scheme itself, there are some reports that individuals have been using the platform to set up referral programs of their own. It is possible that these individuals are attempting to capitalize on the popularity of the Avatar network in order to attract more users and generate a steady income for themselves.
## The Legality of MLM Schemes
The legality of MLM schemes varies from country to country. In the United States, Federal Trade Commission regulations prohibit companies from participating in pyramid schemes, which are defined as businesses that offer rewards for recruiting new members but do not provide any real goods or services. As such, it is possible that Avatar-related referral programs could be considered illegal in the United States.
It is important to note that Avatar does not condone any illegal activities and will take action against anyone attempting to use their platform for such purposes.
While there have been reports of individuals using the Avatar network to set up referral programs of their own, the Avatar network itself is not an MLM scheme. However, it is important to be aware of the potential legal implications of setting up such referral programs, as they may be considered illegal in certain countries.