Pi Network’s Transition Sparks Legal Concerns Amid Pyramid Scheme Warnings from Experts

• Pi Network’s transition to an Open Network in February 2025 sparks legal concerns, with experts warning about its pyramid-like structure.

• Despite boasting over 19 million verified users, Pi Network faces scrutiny for its referral-based mining system and lack of monetary value.

• Experts caution potential legal risks, particularly in regions with strict anti-pyramid scheme laws, as Pi Network grows globally.

Pi Network’s upcoming transition to an Open Network raises legal concerns amid warnings of its pyramid-like structure and mining processes.

Pi Network’s Transition Launch Sparks Legal Concerns

The platform already boasts over 19 million identity-verified Pioneers. It has also surpassed its 10 million Mainnet migrations goal, reaching 10.14 million. As COINOTAG reported, Pi Network’s Pioneers (users) would be able to interact with other compliant networks and systems following the imminent launch.

However, as the launch date approaches, industry experts are voicing concerns about the platform’s legitimacy and potential legal implications. Colin Wu, a renowned blockchain journalist popular for his insights on the Chinese crypto market, warned regarding Pi Network’s operations.

In a post on X (Twitter), Wu cautioned individuals about the risks associated with the platform. He cited regions with stringent regulations against pyramid schemes.

“Regarding PI, if you still want to go back to the mainland occasionally, I suggest you don’t report it or touch it,” the analyst cautioned.

Wu also emphasized the severity of legal repercussions, stating that involvement, even indirectly, could lead to significant personal and familial consequences.

Other industry figures echoed Wu’s apprehensions. Among them is AB Kuai.Dong, founder of a metaverse project. The expert described the Pi Network as “the largest pyramid scheme in the Chinese-speaking world.”

He highlighted the platform’s low entry barrier, where users can mine Pi coins directly via mobile phones. Similarly, its referral system, which incentivizes inviting others to increase mining speed, raises concerns.

“Invite others to increase mining speed. As the number of users increases, mining rewards will gradually decrease. In terms of narrative, PI coins can be used for real consumption. Pi holders believe that its future market value can match that of Bitcoin,” Kuai.Dong explained.

Adding to the discourse, Crypto V, a crypto market commentator, acknowledged Pi Network’s pyramid-like marketing structure. However, the analyst stopped short of labeling it a scam.

“Pi is a local marketing and a pyramid scheme, but it is not a scam,” Crypto V challenged.

Expert Shares Pi Network Analysis

Still following his stance, Crypto V referred to a previous analysis of Pi Network’s origins and mechanics. Launched on March 14, 2019, Pi Network is an app-based platform that allows users to mine cryptocurrency on their mobile devices.

The mining process involves users clicking a button every 24 hours without financial cost. The platform employs a multi-level marketing strategy, encouraging users to invite others to join, which increases their mining rate. This structure has led to comparisons with pyramid schemes, as the platform’s growth heavily relies on user recruitment.

“The team told the community without hesitation: Pi has no monetary value. It is not worth money just because it is called a coin. Pi will only have value when the community is larger and has more users,” Crypto V said.

The analysis further highlighted Pi Network’s primary audience. They reside in regions like Southeast Asia, South Asia, Nigeria, and marginalized communities in Europe and America. For many in these areas, the platform offers an accessible entry point into the crypto market, especially given the minimal technical requirements and zero financial investment.

As Pi Network prepares for its Open Network launch, potential users and investors should exercise caution. The platform’s growth and unique approach have undeniably made it a subject of intrigue.

However, its legitimacy remains questionable, as it operates centrally. The mounting concerns about its operational model and potential legal ramifications cannot be ignored.

Conclusion

In summary, Pi Network’s transition to an Open Network brings significant prospects but also critical challenges that could affect its long-term viability. Stakeholders should proceed with vigilance and stay informed about regulatory developments, as the platform’s future will depend on its ability to navigate legal scrutiny while maintaining user trust.