1️⃣ Regulatory Crackdown: Chinese Authorities Uncover Alleged Fraud

In February 2025, China’s Ministry of Public Security launched a large-scale investigation into what it describes as the world’s largest “air coin” fraud. Authorities froze 18,000 accounts, arrested 37 key promoters, and uncovered illicit funds exceeding ¥23 billion. Reports suggest that a leading Pi Coin promoter’s mansion contained bundles of cash, while their garage housed a fleet of luxury vehicles, allegedly purchased with investors’ money.

Judicial Report Confirms Centralization

An official report from the Shanghai Blockchain Judicial Appraisal Center revealed that:

✅ Pi Coin’s “mainnet” is a centralized database hosted on Alibaba Cloud.

✅ The plagiarism rate exceeds 91%, with large portions copied from existing blockchain projects.

✅ Transaction records can be altered at will, raising concerns over transparency and legitimacy.

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2️⃣ The Pi Coin Py ramid Scheme: Layers of Deception

🔺 The “Stanford PhD” Illusion

Founder Nicolas Kokkalis is alleged to have left the project long ago, with his official website image traced back to a 2015 academic event.

Pi Coin’s white paper reportedly plagiarized large sections from Cardano, Polkadot, and other blockchain projects, with key sections generated by AI.

📈 Recruitment Profits & High Commissions

Promoters allegedly earned up to 32% in commissions for recruiting new users.

Reports claim that a housewife in a third-tier city made ÂĽ800,000 per month solely from recruitment.

A “brainwashing script library” with 478 pre-written sales pitches was allegedly used to persuade investors, including phrases like:

“Not mining Pi means giving up financial freedom.”

💰 Heavy Losses for Ordinary Investors

60% of Pi Coin’s user base is reportedly over 50 years old, with some mortgaging their homes to acquire Pi accounts.

A retired teacher in Hebei allegedly invested ÂĽ380,000 in retirement savings, only to see their account become worthless.

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3️⃣ Exposing the Technical Illusions Behind Pi Coin

🔍 Blockchain or Fake Chain?

Pi Coin’s transaction speed (TPS) is only 7, less than 1/10 of Bitcoin’s capacity.

Analysis revealed that 73% of network nodes are controlled by a single IP range, indicating heavy centralization.

⛏ “Mining” or Just a Timer?

Reverse-engineering of the Pi mining app allegedly showed that mining is merely a timer-based function, with no actual computational work being performed.

Developers reportedly had backend access to modify users’ “mining power” at will.

💸 Evidence of a Fund Scheme

On-chain data suggests early developers continuously sold off Pi Coin, with one address transferring out 23,000 ETH in a single month.

Allegations indicate that illicit funds were used to purchase a 47-story office tower in Dubai, labeled the "Pi Global Ecological Center."

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4️⃣ Evolution of Crypto Ponzi Schemes: From Five Elements Coin to Pi Coin

📜 Rebranded Scams, Same Playbook

2017: Five Elements Coin – Marketed as a “national secret project”.

2021: Pi Coin – Branded as a “Stanford blockchain revolution”.

The core structure remains unchanged:

Recruitment-based rewards + Promises of high returns + Fake endorsements.

🎯 Targeting the Middle-Aged & Elderly

Square Dance Marketing – Advertisements played via loudspeakers at dance gatherings in 300 cities.

Health Seminar Tactics – Free giveaways (eggs, cooking oil) used as bait to encourage attendees to download the Pi mining app.

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5️⃣ How to Identify the Next Pi Coin

🚨 Six Red Flags of a Crypto Ponzi Scheme

✅ “Zero-Cost Wealth” promises with no upfront investment.

✅ Mandatory recruitment of new members to generate income.

✅ Claims of government backing with no verifiable sources.

✅ Censorship of skeptics within the community.

✅ Hosted on overseas servers to evade regulations.

✅ Founder’s identity is unclear or their credentials are misrepresented.

🔎 Key Warning Signs of a Scam Token

No functional product or transparent development process.

No open-source code (Pi Coin’s GitHub repository hasn’t been updated since 2020).

No security audits from trusted firms (legitimate projects undergo CertiK audits).

No real on-chain transactions—check the block explorer to verify activity.

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🔮 The Future of Crypto Scams: What Comes Next?

The collapse of Pi Coin may not be the last of its kind. With AI-generated white papers, deepfake endorsements, and metaverse-based pyramid schemes, future crypto scams could become even more sophisticated.

Stay vigilant. Stay informed. Protect your investments.

#CryptoScam #PiCoin #BlockchainFraud #PiNetwork