Allegations of Scamming Targeting Vulnerable Individuals
On Thursday, Ben Zhou, the CEO of Bybit, announced that his cryptocurrency exchange would not be listing the newly released PI token from the Pi Network. This decision follows alarming warnings from Chinese law enforcement, which labeled the project a scam aimed at exploiting elderly individuals. Reports indicate that the scheme involved leaking personal information leading to potential pension losses among its targets.
Strong Words from Zhou on Social Media
In a post on X, Zhou expressed his firm stance against the project, stating, “Yes, I still think you are a scam, and no, Bybit will not list scams.” His comments reflect a growing skepticism surrounding the legitimacy of the Pi Network, echoed by various reports questioning its trustworthiness.
Lack of Response from Pi Network
Despite attempts to seek clarification, the Pi Network has yet to respond to inquiries from CoinDesk regarding these serious allegations. The timing of Zhou’s remarks coincided with the launch of the token, which went live with the release of the project’s mainnet.
Market Performance of the PI Token
Upon its launch, the PI token debuted on the OKX exchange at $0.67. It initially surged to $2 but subsequently experienced a significant decline of 65%, stabilizing around $0.69 as of the latest updates. This volatility raises concerns about the project’s stability and sustainability.
Marketing Strategies Raising Red Flags
One of the marketing strategies employed by the Pi Network has drawn significant scrutiny. Users could increase their “mining” rewards by inviting others to join the platform using referral codes. This recruitment model has led many to liken it to the infamous Ponzi scheme, Bitconnect, which collapsed in 2017. A user on X, known as CryptoBeast, even labeled the Pi Network as “the biggest Ponzi scheme,” sharing this sentiment with his 656,000 followers.
Long-Term Token Locking Options
The Pi Network also offers participants the option to lock their tokens for extended periods, up to three years, with promises of enhanced rewards. This strategy is reminiscent of the Hex project, whose founder, Richard Schueler (popularly known as Richard Heart), is currently a fugitive wanted by the U.S. Securities and Exchange Commission (SEC) for various fraudulent activities.
Market Capitalization and Future Projections
As it stands, the PI token boasts a market capitalization of $4.18 billion based on a circulating supply of 6.33 billion tokens. However, its inflationary structure, with a maximum supply capped at 100 billion tokens, implies a fully diluted valuation (FDV) of around $67 billion at current prices. At its peak, the FDV reached an astonishing $200 billion, nearly double that of Solana.
Contrasting Exchange Participation Amid Concerns
Despite the controversies surrounding the Pi Network, some exchanges remain unfazed. OKX, Bitget, and Gate have collectively achieved trading volumes of $620 million for PI trading pairs, according to CoinMarketCap. This active market participation highlights the divided opinion on the project’s legitimacy.
In conclusion, as the situation continues to unfold, investors and users alike should remain cautious, weighing the risks involved in engaging with the Pi Network and its associated token.
