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A pyramid scheme is a method of generating income for participants by continuously attracting new funds. Income paid to the initial participants is funded by contributions from subsequent participants. In most cases, the true source of income is concealed, and a fictitious or insignificant source is cited instead. Such misrepresentation constitutes fraud. As a rule, a pyramid scheme promises high returns that cannot be sustained over the long term, and it becomes obviously impossible to fulfill the scheme's obligations to all participants. This monograph examines the characteristics of a pyramid scheme as an illegal method of generating income and outlines legislative approaches to addressing this problem in the Republic of Kazakhstan.
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