Anyone who puts money in is supporting the scheme and all of the returns that they get will be dirty money from naive later investors, often people who were referred into the scam.
I've seen a few different stripes of MLM scheme. Some actually generate value, like the ones that sell the offbrand products, or privately made products. If you can generate customers, you can actually make value in the system (not just extract it from others in the system). But for the ones that are thinly veiled Ponzi schemes; yes, this is blood money.
But still both version is not healthy business in my opinion.
The fair business should have a win win solution, i mean both sides should have get profit that makes sense.
In MLM the system looks really shady not transparent , the point is that really about collecting money other people and run when they think it is enough.