The post Pi Coin News: A Look at Alleged Past Scams As China Issues Warning After 65% Crash appeared first on Coinpedia Fintech News
Pi Network’s highly anticipated official launch on February 20 has resulted in its listing on several exchanges. At press time, the price has crashed by more than 65% and is currently trading at $0.65. Pi Coin has been a subject of controversy for quite some time. What initially appeared to be an innovative blockchain project aimed at bringing cryptocurrency to mobile phones has been plagued by several allegations and reports pointing to its questionable practices.
Pyramid Scheme and Multi-Level Marketing (MLM) Allegations
One of the primary concerns surrounding Pi Coin is its referral-based mining system, which bears a striking resemblance to a multi-level marketing (MLM) structure. In this setup, users are encouraged to invite others to join the platform, with those recruits becoming part of the original user’s “downline.” This creates a hierarchical system where those who recruit more members benefit financially by increasing their mining rates.
The Hengyang City Public Security Bureau of Hunan Province, in a July 2023 release, labeled Pi Coin as a scam, specifically pointing to its hierarchical invitation mechanism. This practice, which rewards recruiters for bringing in new members, is a key feature of pyramid schemes.
Preying on the Elderly
According to reports, Pi Coin has unfortunately been involved in schemes targeting the elderly. According to the Wuxi City Public Security Bureau’s release in July 2023, scammers used Pi Coin’s promise of getting rich overnight to lure elderly individuals into downloading its mobile app. The scammers often claimed that users could mine Pi Coin for free by simply using their phones and inviting others to do the same.
Several police reports show incidents where elderly individuals were deceived into uploading sensitive personal information, such as identification cards, as part of the sign-up process. This, in turn, exposed them to further risks, including identity theft.
Data Leaks and Privacy Concerns
Another major issue Pi Coin has faced involves serious privacy breaches. In May 2021, a large-scale data leak occurred involving the personal information of approximately 10,000 Vietnamese citizens. The leak, which included sensitive data like identity card numbers, phone numbers, and home addresses, was allegedly tied to Pi Network.
Although Pi Network denied responsibility for the leak, claiming that the data had been compromised by a third-party service provider, Yoti, this incident further tainted the project’s reputation.
