Pi Network Responds to ‘Scam’ and ‘Multi-Level Marketing’ Allegations

Pi Network addressed charges that it is a “scam” and multi-level marketing scheme, denying any wrongdoing and saying it is misunderstood.

As The Defiant reported on March 25, Bybit exchange CEO Ben Zhou called the project a scam and said it would not list the PI token. Then cryptocurrency fund Cyber Capital founder and CIO Justin Bons launched his own attack, repeating the scam accusation and calling it “a ‘multi-level marketing’ type scheme through referral programs.”

Pi Network is a mobile phone mining project with more than 100 million downloads on the Google App Store. PI token’s price has been hurt by the allegations. Following its long-awaited Feb 20 mainnet launch, the price fell from an all-time high of $2.99 on Feb. 26 to its current $0.82, according to CoinGecko.

Denying it had ever reached out to Bybit in the first place, a Pi Network spokesperson referred The Defiant to an X post claiming that people were impersonating it with exchanges like Bybit and seeking unauthorized listings.

As for the multi-level marketing (MLM) allegation, Pi Network went in detail into how its referral program works, starting with the lack of any cost, in fiat or cryptocurrency, to mine PI or join its referral program, the spokesperson said in an email.

Rather than a MLM-style system in which any member gets a cut of the earnings of someone they onboarded, and everyone that person onboards in the future, Pi Network’s referral program is only one level deep, between the referrer and the referred.

“If Person A refers Person B, and Person B then refers Person C, Person A and Person C have no relationship and do not receive any mining bonus as a result of them being referred in,” the spokesperson said.

The referral program gives a 25% bonus to both the referrer and the referred as long as they are mining at the same time.

“Like any other common referral programs used in retail, banking, online commerce or other crypto related businesses, the Pi Referral Program is intended to encourage adoption by providing benefits to both the referrer and the referee,” he said.