US lawsuit accuses Pi Network founders of massive token deception

A federal lawsuit filed on 24 October 2025 in the US District Court for the Northern District of California alleges that Pi Network and its parent company SocialChain Inc. secretly sold roughly 2 billion Pi tokens, engaging in what the plaintiff describes as securities fraud and market manipulation. The claimant, an investor from Arizona, seeks US$10 million in damages, claiming that the covert sales and misrepresentation caused his holdings—and those of many others—to plummet in value.

The complaint targets the project’s co-founders, Chengdiao Fan and Nicolas Kokkalis, alongside related entities, charging that the insiders misled users about token distribution, retained disproportionate control over supply, and withheld access to liquidity while off-loading large holdings to third-party IOU-markets without disclosure. As per the filing, the transfers and sales occurred despite the mainnet not being officially open for trading, raising serious doubts over fairness and transparency.

Defenders of Pi Network point out that the lawsuit appears to focus on third-party IOU markets rather than the mainnet-bound Pi coin itself. The project has always warned users that such markets are speculative and unofficial, with no guarantee of liquidity. They argue that the circulating IOU valuations, sometimes cited in arguments over alleged losses, reflect nothing more than unregulated speculation rather than legitimate market price.

The Pi Core Team has issued the following statement in response to this report.  “The legal representatives of Pi Network are working on a motion to dismiss this frivolous matter.  Pi vehemently denies these allegations and together with Pi’s external counsel, are vigorously disputing them.”