TechFlow news, on February 13, Liu Zhengyao, a lawyer from Zhiheng (Shanghai) Law Firm, published an analysis stating that after Pi Network launched on exchanges and opened secondary market trading, its promotion model may constitute pyramid scheme offenses under Chinese criminal law. According to the analysis, Pi Coin currently lacks support from any tangible project and operates through an invitation system that establishes hierarchical relationships. Inviters can gain benefits such as mining acceleration by recruiting new members.
Notably, individuals who obtain Pi Coins by recruiting subordinates and then sell them on exchanges could face criminal liability. If the subordinate network exceeds three levels, organizers may be sentenced to fixed-term imprisonment of up to five years along with fines. If the case involves amounts exceeding 2.5 million RMB or more than 120 recruited individuals, the sentence may exceed five years.
In addition, in July 2023, the Hengyang Municipal Public Security Bureau in Hunan Province issued a statement warning of potential risks associated with Pi Coin.
