Bybit CEO Labels Pi Network a Scam, Citing Police Warning and Ponzi Scheme Concerns
Bybit CEO Calls Pi Network a Scam Amid Allegations and Police Warnings
In a bold statement on Thursday, Bybit CEO Ben Zhou publicly condemned the Pi Network and its recently launched PI token, calling the project a scam. Zhou’s remarks came after a 2023 Chinese police warning claimed the project targeted elderly individuals, exploiting their personal information and leading to significant financial losses. Bybit, Zhou confirmed, will not list the PI token on its platform, highlighting concerns about the token’s legitimacy.
The Chinese Police Warning and Concerns About PI Network’s Legitimacy
In his post on X (formerly Twitter), Zhou referenced an official police warning from 2023, which alleged that Pi Network was preying on vulnerable individuals, particularly the elderly, to extract personal data and endanger their savings. The warning raised red flags about the project’s referral system and token lock-up scheme, which many critics have compared to notorious Ponzi schemes such as Bitconnect and Hex.
“There are multiple other reports out there questioning the project’s legitimacy,” Zhou wrote. “Yes, I still think you are a scam, and no, Bybit will not list scam.”
Despite the serious allegations, Pi Network did not respond to CoinDesk’s request for comment. The Pi token made its debut on OKX on Thursday, coinciding with the project’s mainnet release, allowing users who had mined tokens through daily smartphone clicks to transfer and sell their tokens for the first time.
However, the token’s launch was marred by controversy, with the price initially soaring to $2 before plummeting by 65% to around $0.69—a dramatic drop from its launch price of $0.67.
Marketing Tactics Raise Red Flags: Comparing Pi Network to Ponzi Schemes
One of the most concerning aspects of the Pi Network’s model is its referral-based marketing tactics, which reward users who recruit others to join the platform. This type of referral system has raised alarms, with critics drawing comparisons to Bitconnect, a 2017 Ponzi scheme that ultimately collapsed.
According to one X user, CryptoBeast, Pi Network is the “biggest Ponzi [scheme]”, a sentiment echoed by others who have questioned the integrity of the project.
The project also allows users to lock their tokens for periods of up to three years in exchange for higher rewards. This tactic has been likened to Hex, a controversial project whose founder, Richard Heart, is currently a fugitive sought by the U.S. SEC for allegedly defrauding investors. Such practices have raised concerns among investors, suggesting that the PI token could be another inflated scheme ripe for exploitation.
Pi Network’s Market Value and Inflationary Concerns
Despite the controversy surrounding its legitimacy, the Pi Network token has gained significant market traction. With a circulating supply of $6.33 billion, the token currently holds a market cap of $4.18 billion. However, its inflationary nature is troubling. The project’s maximum supply is capped at 100 billion tokens, which would put its fully diluted value (FDV) at a staggering $67 billion, assuming the token holds its current price.
At launch, the FDV of the PI token skyrocketed to $200 billion, nearly double the market cap of Solana at the time. This rapid inflation has raised further concerns about the sustainability of the token’s value.
Despite these red flags, some exchanges, including OKX, Bitget, and Gate.io, have facilitated PI trading pairs, generating a total trading volume of $620 million across these platforms. The substantial trading volume suggests that, for some investors, the allure of quick profits is outweighing the risks associated with the token.
Conclusion: A Volatile Launch and Uncertain Future for Pi Network
The launch of the Pi Network’s PI token has sparked fierce debate within the crypto community, with accusations of it being a Ponzi scheme and concerns over its inflated market value. Bybit CEO Ben Zhou’s public stance against the project underscores the growing scrutiny facing Pi Network, especially given the police warnings and Ponzi-like marketing tactics.
While the token has generated significant trading volume and attracted attention from certain exchanges, its long-term viability remains uncertain. Pi Network’s inflationary model and controversial marketing practices raise serious questions about its legitimacy, and investors should approach with caution.
As the crypto world watches the unfolding developments, the future of Pi Network and its PI token remains shrouded in controversy, with potential consequences for both investors and the broader cryptocurrency market.
Stay tuned for further updates as this story continues to unfold.
