Authorities in Vietnam have initiated an investigation into the Pi Network and its associated cryptocurrency, citing concerns over the network’s complexity, lack of transparency, and similarities to multi-level marketing schemes. The Pi Network, which gained popularity in Vietnam during the 2021 crypto bull market, allows users to mine tokens using their mobile phones. However, the network’s purpose beyond token exchange remains unclear. The investigation raises questions about the viability and legitimacy of the Pi Network and serves as a reminder of the potential risks associated with emerging cryptocurrency projects.
The Investigation and Concerns:
Vietnam’s Department of Cybersecurity and High-Tech Crime Prevention commenced an investigation into the Pi Network on June 30. Department head Le Xuan Minh expressed concerns about the network’s complexity and unregulated nature, emphasizing that no other online business activity generates such high levels of income. He also cautioned against cryptocurrency promoters adopting business models resembling multi-level marketing schemes. Local media reported that the crypto network lacks the necessary transparency expected from a blockchain project, making it susceptible to potential misuse for fraudulent purposes or data collection.
The Pi Network and Its Background:
The Pi Network was launched in March 2019 and gained popularity in Vietnam and India during the 2021 crypto bull market. One of the network’s main attractions is its ability to allow users to mine PI tokens through their mobile phones without the need for expensive mining hardware. However, critics argue that the network lacks a clear purpose beyond serving as a medium of exchange for these tokens. The Pi Network boasts 47 million engaged members and claims a team of 35 core members based in Silicon Valley and around the world. Co-founders Dr. Nicolas Kokkalis and Dr. Chengdiao Fan bring academic credentials from Stanford University.
Crypto Popularity and Regulatory Environment in Vietnam:
Cryptocurrency has enjoyed significant popularity in Vietnam, with the country ranking first in adoption according to Chainalysis in 2022. However, it is important to note that crypto assets are not recognized as legal tender in Vietnam, signaling a cautious regulatory stance from the authorities. This investigation into the Pi Network highlights the need for regulatory scrutiny to protect users and investors in the rapidly evolving crypto landscape.
PI Token Listing Debacle:
The Pi Network faced controversy when rumors spread that the PI token was listed on Huobi, causing its price to surge to $230. However, the Pi Network team swiftly clarified that the listing was unauthorized. To date, no exchanges have officially listed the PI token, prompting the team to reiterate that Pi is currently in the Enclosed Network and has not received approval for listing or trading on any exchange.
The investigation launched by Vietnamese authorities into the Pi Network and its associated cryptocurrency reflects concerns over the network’s complexity, lack of transparency, and potential similarities to multi-level marketing models. As cryptocurrency gains popularity worldwide, it is crucial for regulators to evaluate emerging projects to protect consumers and maintain the integrity of the financial system. The Pi Network’s status remains uncertain, and users should exercise caution and skepticism when engaging with projects that promise easy and potentially lucrative rewards.