This is another scam that keeps on returning with slight changes to appear to be something new and even legal, but if it looks like a duck, walks like a duck and quacks like a duck, it is most likely a duck and a chain letter is easy to spot unless you are blinded by greed.
At its most basic a chain letter involve you receiving a letter that contains the names of a number of people, often five. You are asked to send a sum of money to the first person on the list, take his or her name off of the list, add your name to the list as the last person and send it to five more people with the same instructions.
The problem is not only are chain letters illegal, they are also doomed to failure as they will rather rapidly run out of people to participate.
Chain letters are sometimes disguised to resemble legitimate business operations and you may even be sent some inexpensive item as part of the scam to make it appear to be a legitimate business proposal. However, it is easy to see that it is the pyramid that drives the chain letter and nothing of value is done to put oneself in a position to receive compensation. A scam by any other name is still a scam.
Never get involved with chain letters regardless of their format.