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OKX Announces “Isolated Token Listing Model” for PI Coin
Legality Issues Surrounding PI Coin
Recently, one of the key focuses of the cryptocurrency market has undoubtedly been the launch of the Pi Network mainnet and the impending listing of its token on exchanges. Trading platforms such as OKX and Bitget have successively announced that they will open PI coin trading on February 20, a piece of news that quickly sparked heated discussions in the market. However, OKX unexpectedly announced yesterday that it would adopt an “isolated token listing model,” which means that users in certain countries and regions will be unable to deposit or trade the coin. According to Chinese media outlet “Wu Says Blockchain,” users in China will be excluded from participation.
It is speculated that this sudden decision may be related to the legality issues surrounding PI coin in certain countries.
According to an analysis released by Liu Zhengyao, a lawyer from Hengeng (Shanghai) Law Firm, on February 13, PI coin has been mined through a mobile app since its launch in 2018, featuring an invitation mechanism that allows participants to accelerate mining speed by referring new users. However, this “referral-based” promotional model bears many similarities to the definition of pyramid schemes in Chinese criminal law.
Chinese law stipulates that if an organization, under the guise of business operations, requires participants to pay fees or develop downlines to obtain profits, and if the levels reach three or more with more than 30 participants, it may constitute a pyramid scheme crime. Lawyer Liu pointed out that buying and selling PI coin does not constitute a crime; at most, individuals 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 indeed meet the definition of pyramid scheme crimes. Liu stated:
“Obtaining and selling PI coins through the development of downlines, once the downline levels exceed three (including three), qualifies as a pyramid organization under Chinese criminal law, as well as its leaders or accomplices; typically, this could result in a prison sentence of less than five years and fines; if the amount involved exceeds 2.5 million RMB or the number of developers exceeds 120, it becomes more serious.”
Moreover, it is worth noting that as early as July 2023, the Public Security Bureau of Hengyang, Hunan Province, clearly stated that PI coin is a scam. Lawyer Liu pointed out that once judicial authorities determine that PI coin involves pyramid scheme activities, participants may face criminal risks, and related funds could even be confiscated.
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