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Social Chain, the company behind Pay, is suing it for $10 million after an investor accused it of orchestrating a fraud scheme.
The complaint alleges that the company conducted unauthorized token transfers, secretly sold 2 billion Pi tokens, and intentionally delayed network migration. These actions caused a dramatic collapse in the price of the tokens.
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Federal securities fraud case challenges Pi Network leadership
According to court documents, the lawsuit was filed on October 24 in the US District Court for the Northern District of California. It was assigned to Judge Nathaniel M. Cousins. The complaint is aimed at the founders of the eBay network Chengdiao fans and Nicholas Cokkalis, as well as the social chain.
The plaintiff, Haro Moen Moen of Arizona, alleges a years-long scheme that caused significant financial losses. He is demanding 10 million dollars in compensation.
Moen added that 5,137 PayTokens have been completed Transferred from your confirmed wallet To an unknown address without his authorization on April 10, 2024. He also added that the situation was aggravated by the failure to migrate the remaining 1403 tokens to the Pay network.
The complaint also alleges that despite marketing eBay as a decentralized network, the defendants…THyoursMMRecZ With only one runfrom Three nodes checked.
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added one observer Market That the defendant accuses the bank of being an unregistered security is another whole issue.
The CorePay team has not addressed the lawsuit publicly. However, it was Bay community Quick to challenge many of the plaintiff’s claims. Many executives argue that unauthorized token transfers can result from compromised login credentials or phishing attempts. They indicated that these incidents do not cause any errors on the part of the team.
It is also important to mention that Pai Network launched its main open network in February. OKEx, the first exchange to list Pay, offers it at a price The plan is worth $2. The price of the Pi coin rose to a maximum of $2.99 ​​later this month. This raises the question of how the plaintiff arrived at a price assessment of $307.49.
Community members suggest that a large part of the plaintiff’s argument is based on losses Association with IOU trading. Bay Core Shadow Team notice constantly against This price.
a Reddit user wrote in a response Prosecution for securities fraud: “Where does the price of $307.49 come from? – Even the IOU value has never been so high. Moreover, from a legal perspective, the open market value ≠IOU value. The process is based on a misleading equation.”
Overall, the trial intensified the debate in the Bay Area community. With the BayCore team remaining silent and community members challenging the main allegations, the outcome will depend on how the court assesses the evidence behind the alleged losses and differences in valuation.
