Is this paypal scheme legal

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I always come across those paypal chain letters which tell you to send $5 a set a email addresses and you have to add your address in the hope others will do the same. They always mention how legal they are and that it's been on TV e.g. The Oprah Winfrey show but I've also read things which say they are illegal and that paypal will shut down your account and confiscate your balance if you participate in these cyber chain letters. Has anyone taken part in these things? How much have you earned? Did you get hassle from paypal because of it?