- Researcher Justin Bons calls Pi Network a “scam,” citing MLM-style mining and heavy insider control.
- Pi’s tech mimics Stellar, lacks smart contract support, and long token lockups favor insiders.
- Regulators and industry experts warn Pi targets vulnerable users, with evidence of insider token dumping.
Alarm has spread across the crypto market after researcher Justin Bons publicly labeled Pi Network a “straight-up scam.” Bons released a detailed thread outlining structural flaws, governance concerns, and alleged insider advantages.
In an X thread, Bons argued that the project depends heavily on flashy marketing and questionable token economics. Consequently, his remarks pushed many analysts to reexamine Pi’s decentralization claims and its long-delayed development progress.
Bons also pointed to the platform’s mobile “mining” feature. He said this activity does not actually support blockchain consensus. However, the project still promotes it as real mining to attract users. He stated, “WARNING: PI is a straight-up scam! Offering an ‘MLM’ based ‘mining’ scheme on mobile is a gimmick.”
Besides, Bons highlighted another major concern. The network requires users to complete mandatory KYC verification before fully participating. Hence, he argued this requirement conflicts with the core idea of decentralized cryptocurrencies, which typically aim to operate without strict identity checks.
Centralization Concerns And Technology Questions
Bons also questioned Pi’s claims of being decentralized. He argued that the network still runs under strong control from the core team. Moreover, he pointed out that the project launched its mainnet about five years later than planned. Consequently, many critics now doubt whether the platform truly brings any real technological progress.
Additionally, Bons noted that Pi’s technology is also very similar to the technology used by Stellar. He noted that the technology is not compatible with a virtual machine that is Turing complete. This means that it is not possible to easily create applications such as smart contracts or DeFi applications on the platform. He also noted that the documentation provided is still not clear and is poorly organized. This means that it is difficult to completely trust the platform as a developer or researcher.
Tokenomics, Referral System, And Insider Control
Bons also criticized Pi’s referral system. He said the structure works much like a multi-level marketing program. According to him, users earn about 25% of the mining rewards generated by people they invite. Moreover, he argued that this so-called mining does not add real value to the network. Instead, he believes it mainly encourages more people to join the system.
Additionally, Bons warned about another feature that allows users to lock up their tokens for several years. The platform claims this increases a user’s mining rate. However, Bons compared this approach to the model used by HEX. Consequently, he argued that these long lockups keep users tied to the platform while early insiders benefit if prices rise.
Furthermore, Bons raised concerns about how the tokens are distributed. He claimed the project team holds about 20% of the total supply. He also said the team controls future mining rewards. Moreover, Bons alleged that the network’s validators remain closely linked to the project leadership. Because of that, he believes the team could block or influence governance decisions whenever necessary.
Regulatory Warnings And Market Impact
Regulators and industry experts have also raised red flags over the project. For instance, the Chinese authorities reportedly described the project as a pyramid scheme as early as 2023. In the meantime, the Vietnamese authorities have raised concerns over the project’s activities as well as the associated data risks. However, Ben Zhou, the founder of Bybit, has raised a red flag over the project’s targeting of vulnerable investors.
Bons also pointed to alleged insider selling during a 2025 price spike. He claimed the token rose from $0.66 to $1.60 before crashing sharply. Consequently, this episode added fuel to accusations of insider dumping.
Despite these repeated warnings, Pi still ranks among the top cryptocurrency projects in terms of visibility. Therefore, Bons urged the industry to take a closer look at the project. He stated, “That PI is still in the top 50 is an embarrassment to our industry.”
