Pi Network faces intensifying criticism after prominent cryptocurrency investor Justin Bons publicly denounced the project as a "scam," citing fundamental flaws in its technology and business model. The founder of CyberCapital delivered his assessment through a detailed critique on social media platform X, formerly Twitter, raising alarm about what he describes as misleading claims regarding the network's decentralization capabilities.
"PI is fully permissioned (centralized) and everything requires KYC, even simple transactions! PI is an investment scam; it is that bad," wrote Bons, whose concerns have emerged as the PI's value tumbles below the $1 threshold for the first time since February.
The veteran investor's critique targets multiple aspects of Pi Network's operations, including its repeatedly delayed mainnet launch that has stretched over five years. Central to his technical analysis is the claim that Pi's core technology was copied from Stellar (XLM) without implementing a Turing-complete virtual machine, which he argues severely restricts the network's functionality. This limitation, according to Bons, undermines Pi's ability to support decentralized finance applications, rendering it "neither scalable nor programmable."
Bons particularly condemned the project's referral system, comparing it to multi-level marketing schemes that generate unnecessary network costs without providing tangible user benefits. "PI made it into the top 20 is an embarrassment to our industry," he concluded in his assessment.
The referral program concerns are compounded by what Bons characterized as a "Ponzi-like mechanism" within Pi Network's mining process. He detailed how the token's lockup period potentially allows early investors and insiders to exit with profits through artificial price inflation, while criticizing the lack of transparency regarding insider token allocations despite the network's strict Know Your Customer procedures. These insiders might control as much as 20% of the total supply, Bons suggested, contradicting Pi Network's claims of fairness and equitable distribution.
Bons' critique echoes earlier warnings from Bybit CEO Ben Zhou, who previously labeled Pi a scam that presents greater dangers than speculative meme coins.
The latest wave of criticism coincides with growing frustration among Pi Network supporters toward cryptocurrency exchange Binance. On March 19, Binance unveiled its first batch of Vote to List projects, which included various meme coins but notably excluded Pi Coin despite it reportedly receiving 86% supportive votes.
This exclusion prompted a backlash from Pi supporters. "Stop acting like some third rate junk exchange and fulfill your promises before you start the next vote. I don't know if CZ would have behaved like this if he was still at Binance, he wouldn't be proud of your behavior," one user posted on X.
The community's response escalated to giving Binance one-star ratings on Google Play Store, a tactic that may have backfired. "Do not try to pressure us into listing your coin by spreading FUD or negative comments about Binance, or you will be blacklisted," the exchange warned in response.
Pi Coin's market performance has deteriorated significantly amid these developments. The token has declined 20.1% over 24 hours and 48.7% over the past week, trading at $0.91 at press time according to CoinGecko data. Its market ranking has also suffered, falling to 27th place after previously holding a higher position.
The dual challenges of expert criticism and listing difficulties present significant hurdles for Pi Network as it attempts to maintain legitimacy and value in an increasingly skeptical cryptocurrency market.