Many altcoins such as FOMO BABY (FOMOBABY) promise to redistribute "tax" (membership fees) from newcomers to existing hodlers. Are these cryptos technically functional? Are they illegal pyramid schemes?
It's a clever pyramid scheme in disguise.
I see a lot of NFTs who do this as well and buyers somehow think that this is a positive to have.
This is literally how Bitconnect and other scam coins have run, just in a subtly different form. Please avoid these coins for the sake of the community and to ensure that you're not accidentally supporting these fraudsters.