The In-Depth Pi Coin Scam: A Ponzi Trap and Regulatory Alert for 30 Million Users

1. Regulatory wake-up call: Pi Coin has been characterized as an illegal fundraiser
In February 2025, China's Ministry of Public Security officially issued a warning, indicating that Pi Coin has significant risks and is suspected of illegal fundraising and fraud, which is essentially a Ponzi scheme. This announcement put an end to a five-year craze for "mobile mining." According to statistics, more than 30 million users around the world took part in the "mining" of the Pi coin, of which Chinese users account for 60%. This seemingly inexpensive game of wealth is actually an elaborate financial trap.
2. The Model Revealed: A Digital Game Under the Mask of Blockchain
Pi Coin claims to have been founded by a team of PhDs from Stanford University under the slogan "a digital currency that anyone can participate in," claiming that users only need to tap on a mobile app every day to "mine." However, this "zero threshold" model contradicts the essence of blockchain technology. "Mining" Pi coins does not require the input of computing power, but ends only with the release of additional digital characters in the background of the server; The code has not been open source for a long time, and the basic technical parameters are ambiguous; The degree of centralization is extremely high, and the user account is fully controlled by the project side. Industry experts point out that it's essentially a "video game scoring system." The project team uses the mechanism of social division for rapid expansion and creates a multi-level system of recommendation rewards to encourage users to develop offline. The "earnings" of early adopters do not come from an increase in market value, but rely on the capital investment of new users, forming a typical Ponzi structure.
3. Risk Analysis: Triple Crisis of Technology, Law and Market, Wen Zhang Endured with Gong M: I Want to Eat Soft Rice and Solid Food
Technical level: Pi Coin does not have basic blockchain technical support, and its stated "improved version of the Stellar consensus protocol" has not been verified by a third party. The mainnet has not yet been fully decentralized, and the project team has changed the economic model many times, further weakening its value base.
Legal: The Chinese government has explicitly banned businesses related to virtual currency. Pi coin evades surveillance due to the operation of overseas servers, but internal promotion is suspected of breaking the law. Public security organs in many places have opened cases to investigate cases related to pi coins, and some major promoters face criminal liability.
Market Level: The value of Pi Coin is entirely dependent on artificial speculation. After the mainnet launch, the price of "fake pi coins" plummeted, highlighting the risk of market manipulation. Insider trading has given rise to many new types of criminal activity.
4. The Historical Mirror: The Reincarnation of the Five Element Scam to the Pi Coins
Pi Coin is not alone, and its mode of operation is very similar to that of historical scammers such as Five Elements Coin and OneCoin. Under the slogan of "destroying the financial system," these projects lured investors with false propaganda and tiered rewards, and eventually failed. It is evident that Pi Coin's user base is aging, and criminals are taking advantage of this to carry out fraudulent activities.
5. Rational Answer: Three Strategies to Stay Away from Traps
Stop participating immediately: Uninstall the app and leave the community in question to avoid personal information leaks. The "digital assets" that have been generated have no legal protection, so they do not have the illusion of "realization".
Be careful with secondary harvesting: the recent "Pi coin sale" and "internal trading channels" are new scams. The Ministry of Public Security has issued an early warning that any transaction that requires a transfer or deposit is a scam.
Increased legal awareness: Engaging in illegal financial activities can lead to legal liability. Investors should be aware of the relevant laws and regulations to avoid falling for scammers.
6. Educating the Industry and Overseeing the Future
The Picoin incident has exposed a regulatory blind spot in the virtual currency space. Regulators should strengthen cross-border data tracking capabilities and establish a virtual currency risk assessment system. At the same time, investor education should be strengthened, and basic knowledge about blockchain should be popularized through various forms to guide investors to establish the right investment concepts. In the context of the rapid development of blockchain technology, digital assets with real social value should be built on the basis of technological innovations and compliance operations. The collapse of PiCoin reminds us once again that any financial game that is detached from supporting real value will be a short-lived Ponzi scheme.