Pi Network Faces Shock Lawsuit Allegations Over Securities Fraud Claims

Source: CryptoNewsNet Original Title: Pi Network Faces Shock Lawsuit Allegations Original Link: Pi Network has been embroiled in controversy following a United States federal case filed online on October 24, 2025, that called out founders Chengdiao Fan, Nicolas Kokkalis, and related entities. The suit has alleged the project with securities fraud, accusing it of unfair token distribution, withholding of assets, over-centralization, and alleged manipulation through secret sales of approximately 2 billion Pi coins.

Community warnings further intensified the allegations, cautioning that if the allegations are found to be true, the value and community trust of Pi will drop significantly. The warnings also challenged the Pi Core Team to take action in order to avoid spreading more fears throughout the ecosystem.

Case Still in its Infancy but Community Fear Increases

The lawsuit is still at the preliminary stage as of December 7, 2025. According to court filings, service waivers were agreed to and formal responses will be provided by December 23, so any judgments or factual verdicts are yet to be determined. Nonetheless, doubt has already brought about controversy in the international Pi community.

According to advocates, the suit is attacking third-party IOU markets in certain exchanges, rather than the Pi Network ecosystem or the mainnet-bound Pi Coin. However, critics feel the allegations are in line with long-standing criticisms of the lack of transparency by Pi Network, the late introduction of the mainnet, and the centralized nature of how tokens are supplied.

These accusations are particularly significant since Pi Network has focused its 2025 development updates on decentralization and utility growth, making this information even more consequential if unaddressed.

Sentiment in the Market Becomes Fragile

With no evidence having been substantiated to dispel the unresolved accusations, speculation continues that these allegations might lead to mass sell-offs in Pi-sensitive markets, particularly in areas where the project has high adoption rates. Although there is no open mainnet trading of Pi Coin, community-based valuation markets and barter systems can become volatile in case of spreading fear.

Influencers and analysts throughout the community insist that the Pi Core Team needs to act with urgency, observing that non-response may only serve to heighten distrust and spread misinformation. It is widely thought that only open explanation will help avoid long-term reputational harm.