As a pyramid grows, the number of people involved becomes too large to sustain the it and crumbles. Pyramid schemes collapse when a few people drop out or refuse to pay, and new members are not recruited in their place. In reality, the number of participants is limited. With each new level, there is less chance of recruiting others and a greater chance of losing money. Pyramids are based on simple mathematics.
Many losers pay a few winners.
There is a real risk that ALL the participants will be arrested and subject to fines. They inevitably collapse because it is mathematically impossible to recruit the numbers of people required to support it. Frequently, the entrance fee into the pyramid is very high. In many cases, the money spent for such an entrance fee can often be considered lost the moment you pay. Some entrepreneurs have built successful companies on this concept because the main focus of their activities is product sales.