Pi Network's Open Network Transition Sparks Legal Concerns

Pi Network's transition to an Open Network in February 2025 has sparked legal concerns, with experts warning about its pyramid-like structure. Despite boasting over 19 million verified users, the platform faces scrutiny for its referral-based mining system and lack of monetary value. As Pi Network grows globally, it faces potential legal risks, particularly in regions with strict anti-pyramid scheme laws.

The upcoming transition to an Open Network raises concerns about the platform's legitimacy and potential legal implications. Industry experts, including renowned blockchain journalist Colin Wu, have warned users about the risks associated with the platform. Wu cautioned individuals about the severity of legal repercussions, stating that involvement, even indirectly, could lead to significant personal and familial consequences.

Other industry figures, such as AB Kuai.Dong, founder of a metaverse project, have described Pi Network as "the largest pyramid scheme in the Chinese-speaking world." The expert highlighted the platform's low entry barrier and referral system, which incentivizes inviting others to increase mining speed. As the number of users increases, mining rewards will gradually decrease, raising concerns about the platform's sustainability.

Crypto V, a crypto market commentator, acknowledged Pi Network's pyramid-like marketing structure but stopped short of labeling it a scam. The analyst referred to a previous analysis of Pi Network's origins and mechanics, launched on March 14, 2019, as an app-based platform that allows users to mine cryptocurrency on their mobile devices. The mining process involves users clicking a button every 24 hours without financial cost, employing a multi-level marketing strategy that encourages user recruitment.

Pi Network's primary audience resides in regions like Southeast Asia, South Asia, Nigeria, and marginalized communities in Europe and America. For many in these areas, the platform offers an accessible entry point into the crypto market, especially given the minimal technical requirements and zero financial investment. However, its legitimacy remains questionable, as it operates centrally, and the mounting concerns about its operational model and potential legal ramifications cannot be ignored.

As Pi Network prepares for its Open Network launch, potential users and investors should exercise caution. The platform's growth and unique approach have undeniably made it a subject of intrigue. However, its legitimacy remains questionable, and stakeholders should proceed with vigilance and stay informed about regulatory developments, as the platform's future will depend on its ability to navigate legal scrutiny while maintaining user trust.