In a significant development in the cryptocurrency space, Bybit CEO Ben Zhou has taken a strong stance against Pi Network, explicitly labeling it a scam and refusing to list its PI token on his exchange. This declaration comes amid mounting concerns over the project’s legitimacy and its controversial token launch.
The Controversy Surrounding Pi Network
Pi Network’s token launch has sparked intense debate in the crypto community. The project’s mainnet release allowed users who had been ‘mining’ tokens through daily smartphone clicks to finally transfer and sell their assets. However, several red flags have emerged:
- A Chinese police warning from 2023 alleged the project targeted elderly people
- Users reported personal information leaks and pension losses
- The token’s price showed extreme volatility, debuting at $0.67 and reaching $2 before crashing 65%
- The project employs questionable marketing tactics reminiscent of pyramid schemes
Market Analysis and Implications
The token’s market metrics raise serious concerns about its sustainability:
- Current market cap: $4.18 billion
- Circulating supply: 6.33 billion tokens
- Maximum supply: 100 billion tokens
- Fully Diluted Value (FDV): $67 billion at current prices
These numbers suggest significant inflation risk and potential market manipulation. The project’s FDV briefly touched $200 billion during launch, exceeding established cryptocurrencies like Solana.
Warning Signs and Parallels
Several aspects of Pi Network mirror previous crypto scams:
- Recruitment-based rewards system similar to Bitconnect
- Three-year token locking mechanism reminiscent of the controversial HEX project
- Aggressive marketing targeting vulnerable populations
- Unrealistic value propositions and growth metrics
Trading Activity and Exchange Response
Despite warnings, some exchanges have listed the token. OKX, Bitget, and Gate have recorded $620 million in trading volume. However, this liquidity might not reflect genuine market interest, as wash trading and price manipulation are common in new token launches.
💡 Trade Safely on DefX
Protect yourself from scams – Trade verified tokens with up to 100x leverage on DefX’s secure platform.
Investors should exercise extreme caution with projects displaying these characteristics. The cryptocurrency market’s history is riddled with similar schemes that eventually collapsed, causing significant losses for retail investors.
Tags: Cryptocurrency Scams, Pi Network, Market Warning, Token Launch, Investment Risk
Source: CoinDesk