Pi Coin: Official Launch Event and Controversies Surrounding the Project

The official launch of Pi Network on February 20 quickly attracted attention as the currency was listed on many exchanges. However, right after the official trading, the price of Pi Coin plummeted by over 65%, trading at only around 0.65 USD, causing a wave of concern in the investment community. Invitation System and Multi-level Business Model One of the biggest points of controversy about Pi Coin is its mining mechanism based on inviting friends and family to join. Users are encouraged to invite new members to increase their "downline," thereby accelerating the mining speed of the currency. This structure bears similarities to multi-level marketing (MLM) models (MLM) and is said to be similar to a pyramid scheme. According to an announcement by the Hengyang City Public Security Police Bureau, Hunan Province, in July 2023, Pi Coin's decentralized solicitation mechanism has been criticized as a form of fraud due to its "co-accumulative" nature and excessive rewards for recruiters seen as a feature of pyramid systems. These comments have raised questions about the sustainability and transparency of the project. Exploiting the Elderly In addition to the controversy over the business model, Pi Coin is also entangled in allegations related to taking advantage of vulnerable groups – the elderly. Reports from the Wuxi City Public Security Police Bureau, also in July 2023, said that scammers took advantage of Pi Coin's promise of "get rich quick" to lure seniors into downloading the phone app. They regularly assert that just by using the phone and inviting more friends, users will be able to "mine" Pi Coin for free. In fact, many cases of elderly people have been scammed, forced to provide sensitive personal information such as ID numbers, leading to the risk of identity theft and other security risks. This is one of the dark sides of the project, where the trust of users – especially those who are vulnerable to fraud – is ruthlessly exploited. Data Breaches and Privacy Concerns In addition to business model problems and taking advantage of the elderly, Pi Coin also faces serious allegations of information security. In May 2021, a large-scale data breach exposed the personal information of about 10,000 Vietnamese citizens, including ID numbers, phone numbers, and home addresses. Although Pi Network has denied responsibility and blamed a third-party service provider called Yoti, the incident has raised serious concerns about the project's ability to protect user data. Conclusion Accusations of a multi-level marketing model, exploitation of the elderly, and data security issues have created a rather dark picture surrounding Pi Coin. Although initially introduced as a groundbreaking initiative to bring cryptocurrency to everyone via mobile phones, the collapse of transaction prices immediately after launch and continuous allegations have made the investing community and users doubt its transparency and sustainability. In that context, investors and users should be cautious, need to carefully research information and request transparency from the development team before deciding to participate in any project. Transparency and user rights protection are key factors in restoring trust, especially in a volatile field like cryptocurrency.