Pi Network launched its mainnet with one of the biggest airdrops in crypto history. It was one of the most highly anticipated crypto launches in history, but many have criticized the project as being a pyramid scheme or even a scam.
However, few are aware of the internal leadership turmoil that nearly derailed the project before its launch in 2020.
Pi’s Internal Conflict and Legal Battle
In 2020, Vincent McPhilip, one of Pi Network’s co-founders, took legal action against fellow founders Nicolas Kokkalis and Chengdiao Fan. He claimed they removed him from the company unfairly and mishandled financial resources.
McPhilip alleged that Kokkalis and Fan, a married couple, brought personal conflicts into the workplace, creating a toxic environment.
He described incidents involving verbal altercations and physical confrontations that made it difficult for him to lead effectively. McPhilip further stated that he spent more time addressing their disputes than focusing on business operations.
“Kokkalis and Fan had marital issues which manifested themselves not only in workplace shouting and screaming but acts of physical aggression towards each other witnessed by plaintiff,” the lawsuit stated.
Tensions escalated in April 2020 when McPhilip stepped away temporarily to address internal issues. However, Kokkalis and Fan viewed his absence as abandonment and revoked his access to company assets, including servers and financial accounts.
McPhilip also accused them of trying to dilute his ownership of the project. He claimed they planned to issue new shares at an undervalued price of $0.00005 per share, reducing his stake.
This was particularly significant given that Pi Network had previously secured substantial funding through Simple Agreement for Future Equity (SAFE) investments, raising capital at a $20 million valuation in 2019 and 2020.
Kokkalis and Fan countered these claims, arguing that McPhilip was dismissed due to violations of the company’s policies.
The dispute was ultimately settled in July 2023, but the resolution details remain undisclosed. Since then, McPhilip has maintained his interest in the crypto sector by founding a new project called Knomad and consistently interacting with the sector on X.
Pi Network Rejects Scam Allegations
Despite its growing user base, Pi Network has faced accusations of fraudulent activities.
On February 22, the team addressed these claims, clarifying that scammers unaffiliated with the project had been falsely using its name.
According to the team, a police report in China warned of individuals impersonating Pi Network representatives. The team stated that they had no involvement in the situation and had not been contacted by authorities regarding the matter.
“Pi Network has not been contacted by any police department in China regarding this incident. Pi strongly condemns any alleged activities by any bad actor,” the team stated.
Furthermore, Pi Network dismissed claims of links to cryptocurrency exchange ByBit or its CEO, Ben Zhou. They stated that no official communication had occurred and that Pi Network had never commented on ByBit or its leadership.
The team also distanced itself from a social media account that had made negative remarks about Zhou, reaffirming that the project had no affiliation with the statements.
“Neither Pi Network, nor anyone affiliated with Pi Network, has ever commented about ByBit or Mr. Zhou, whether on social media or otherwise. To that end, other than the comments mentioned in this post, Pi Network – despite the comments made about Pi – still has no comment and retains its position to make no comment regarding ByBit, Mr. Zhou, or their business,” the project concluded.
Despite these challenges, Pi Network’s token has experienced a sharp increase in value. PI experienced an 86% surge within 24 hours, bringing the token’s price to $1.50 as of press time.
This marks a strong recovery from its earlier drop below $1 following the mainnet launch. Pi’s fully diluted valuation now stands at $158 billion, with a market capitalization of around $10 billion.
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