This paper has made in-depth analysis and study on present pyramid selling and has revealed that it is extremely urgent to perfecting state legislation system as there exists defects and deficiencies; especially after Chinese government had made out series of laws, regulations and measures, pyramid selling is still expanding rapidly despite repeated prohibitions.The paper aims to arouse awareness of pyramid selling, for its damages and severity, it is also in purpose of setting up a systematic law system with ideas and thoughts were made for cracking down pyramid selling.As for the whole paper, definition of pyramid selling has been made as a start, followed by studies elaborated for features and damages of current pyramid selling; defects and deficiencies of legislation related to pyramid selling. Finally, conclusions had been drawn: firstly, organizing and leading pyramid selling activities should be deemed as a charge in separate article that has been classified into crime of property violation; secondly, revising clauses of Criminal Law and the range of statutory sentences in addition to adding expropriation as an accessory punishment and setting general provisions; thirdly, revising criminal judicial interpretation, taking the amount of money involved as one of standards for initiating prosecution and setting identification standards specific to "In case of especially serious circumstances"; fourthly, putting forward the assumption for revising Prohibition of Pyramid Selling Regulations and Law of Punishments in Public Order and Security Administration and conferring law enforcement power to public security organization to strike pyramid selling; as a result, pyramid selling activities that were not admitted as a crime could be punished by adding penalty clauses and administrative detention.