Pi Network Faces Allegations of Wash Trading

Simon Dedic, CEO of Moonrock Capital, recently expressed strong concerns about the legitimacy of Pi Network’s trading activities.

He adds to a list of industry leaders concerned about Pi Network’s operational model. Meanwhile, the cryptocurrency project has reportedly amassed up to 65 million users since its inception in 2018-2019.

Moonrock Capital CEO Criticizes Pi Network

In a detailed post on social media platform X (Twitter), Dedic highlighted several red flags associated with the Pi Network. His primary allegation centers on the authenticity of Pi Network’s trading volume.

“My thoughts: This is just a giant Ponzi that faked it till they made it,” Dedic noted.

Simon Dedic points out that, despite claims of a $26 billion fully diluted valuation (FDV) and a 60% token float, the project appears to lack substantial involvement from the Web3 community. Instead, it has cultivated a following predominantly among non-crypto users, many of whom may not fully grasp the project’s purpose.

A significant portion of Pi’s reported $3.5 billion daily trading volume is concentrated on exchanges such as OKX, Bitget, and Gate.io. Dedic suggests that this volume is predominantly the result of wash trading in Pi Network. Wash trading is a manipulative practice where traders buy and sell the same asset to create misleading market activity.

Further, the Moonrock Capital executive references a Chinese police report from 2023, shared by Bybit CEO Ben Zhou, which labeled Pi Network as a scam project targeting the elderly. This association raises questions about the project’s credibility and the integrity of its reported metrics.

“It checks some red flags for sure and I am not going to touch it. May miss some profits, but better safe than sorry,” noted Swizzy, a Web3 strategist and market researcher.

It is worth noting that this is not the first streak of criticism Pi Network has faced. Two years ago, Vietnam’s Cybercrime Unit initiated an investigation into the project, reflecting ongoing concerns about its operations. More recently, legal experts have issued warnings about potential risks associated with Pi Network, and analysts have questioned the prudence of listing Pi on major exchanges.

Despite these criticisms, some analysts defend Pi Network, arguing that it offers a unique approach to cryptocurrency adoption. Additionally, businesses in Florida have begun accepting Pi Coin for transactions, indicating a degree of real-world utility.

The token’s listing on exchanges like OKX has also provided liquidity for traders, although its price declined after listing.

Meanwhile, the Binance exchange is still mulling listing the Pi token. The exchange initiated a community vote to determine whether Pi should be listed on its platform, which sparked a mix of anticipation and controversy within the crypto space.

The voting process concludes today, and only a fraction of Binance’s extensive user base has participated. While some investors view a potential Binance listing as a legitimizing milestone for Pi Network, others remain skeptical.

If Binance proceeds with the listing, analysts speculate that Pi’s price could temporarily surge. Some investors predict a price range of $5 to $10 in April.

“Everything dumped, the market is bearish, Pi about to hit $2, about to be listed on Binance. By the end of the April Pi will trade above $5. Maybe at $10,” wrote a crypto investor on X.