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OKX Announces PI Coin to Adopt “Isolated Listing Mode”
Legality Issues of PI Coin
Recently, one of the focal points of the cryptocurrency market has undoubtedly been the launch of the Pi Network mainnet and the forthcoming listing of its token on exchanges. Trading platforms including OKX and Bitget have announced that they will open trading for PI Coin on February 20, which has sparked widespread discussion in the market. However, OKX unexpectedly announced yesterday that it would adopt an “isolated listing mode,” meaning that users in certain countries and regions will be unable to deposit and trade. According to Chinese media outlet “Wu Says Blockchain,” users in China will be isolated from trading.
It is speculated that this sudden decision may be related to the legality issues surrounding PI Coin in specific countries.
According to an analysis released by lawyer Liu Zhengyao from Hengheng (Shanghai) Law Firm on February 13, since its launch in 2018, PI Coin has been mined through a mobile app and includes an invitation mechanism, allowing participants to accelerate their mining speed by referring new users. However, this “referral” promotional model bears many similarities to the definition of pyramid scheme offenses under Chinese criminal law.
Chinese law stipulates that if an organization demands participants to pay fees or develop downlines to obtain profits under the guise of business operations, and if the hierarchy exceeds three levels with more than 30 participants, it may constitute a pyramid scheme offense. Lawyer Liu Zhengyao pointed out that buying and selling PI Coin does not constitute a crime; at most, participants may find it difficult to protect their rights through Chinese legal channels after a collapse. However, if individuals obtain and sell PI Coins through the development of downlines, it may meet the definition of a pyramid scheme offense. Liu stated:
“Obtaining and selling PI Coins through developing downlines, once the downline hierarchy exceeds three levels (including three levels), qualifies as a pyramid scheme organization or leader under Chinese criminal law, or as an accomplice. Generally, this could result in a prison sentence of less than five years and a fine; if the amount involved exceeds 2.5 million RMB or the number of developers exceeds 120, harsher penalties may apply.”
Of particular note, as early as July 2023, the Public Security Bureau of Hengyang, Hunan, explicitly stated that PI Coin is a scam. Lawyer Liu pointed out that if judicial authorities determine that there are pyramid scheme activities associated with PI Coin, participants may face criminal risks, and related funds could even be confiscated.