On February 21, 2025, Ben Zhou, CEO of cryptocurrency exchange Bybit, accused the Pi Network of being a “scam.” This accusation is based on a warning issued by Chinese police in 2023, which pointed to fraudulent activities targeting the elderly.

Background of the Pi Network Scam Allegations

Zhou stated that the Pi Network promotes “free cryptocurrency mining just by downloading the app” and that it has been accused of collecting personal information and engaging in fraudulent activities targeting the elderly. He also claimed that the project’s referral scheme and “token lockup” model resemble past Ponzi schemes.

Furthermore, Zhou criticized the lack of transparency in the Pi Network, stating that “a legitimate project should be accountable for addressing allegations.”

Largest Hacking Incident in History Occurs the Following Day

Ironically, the day after Zhou criticized the Pi Network, on February 22, Bybit suffered one of the largest hacking incidents in history. In this attack, approximately 401,000 ETH (worth about $146 million) were stolen. The attackers manipulated smart contract logic to illegally move funds from a multi-signature wallet.

Further investigation revealed that this attack was carried out using sophisticated phishing techniques and social engineering. The attackers altered the user interface to make it appear as a legitimate address, tricking users into approving fraudulent transactions.

Involvement of North Korean Hacker Group “Lazarus Group”

It is highly likely that the North Korean government-backed hacker group “Lazarus Group” was involved. This group is known for past attacks on exchanges like Phemex. In this attack, smart contract logic was manipulated, and funds were moved between wallets.

Impact on the Cryptocurrency Industry and Future Challenges

This incident has had a serious impact on the entire cryptocurrency industry. In particular, the security of blockchain technology and the trustworthiness of exchanges are being questioned. Bybit announced that it would compensate for the losses, but many users are concerned about the security of their assets.

Furthermore, this incident could have ripple effects on other projects. For example, emerging projects like the Pi Network will likely be required to strengthen their security measures and transparency.

Bybit’s Response

Ben Zhou apologized for the incident and reported that “all withdrawal requests have been processed and are now back to normal pace.” He also announced that Bybit is implementing new security measures and working to prevent future occurrences.

Conclusion

This incident has left many lessons for the entire cryptocurrency industry. User protection and enhanced security will become increasingly important in the future. Furthermore, transparency and trustworthiness are required from emerging projects and exchanges.

Readers are also advised to be very careful with their asset management and choose a safe trading environment.