Investors also wanted to invest in a ponzi with madoff - does that make it ok?

I don't think they knew they were putting money in a Ponzi scheme. They thought the gains were coming from real investments.

People who spent money on Terra/Luna knew it was a cryptocurrency that used magic computer maths to make numbers get bigger (until number got small), same as all the other cryptocurrencies.

That's a ponzi too, and no, your ordinary American only looked at the large yield and said oh, i should get in on that, even though, it was some sort of ponzi with funny dynamics.

So no, it's still a ponzi, and no, most people had no idea.