Bybit CEO Ben Zhou said Thursday that his exchange will not list the Pi Network’s PI token, which was controversially released on Thursday, citing a Chinese police warning from 2023 that alleged the project was a scam targeting elderly people, leaking their personal information and leading to the loss of their pensions.

«There are multiple other reports out there questioning the project legitimacy,» Zhou posted on X. «Yes, I still think you are a scam, and no, Bybit will not list scam.»

The Pi Network didn’t respond to CoinDesk’s request for comments.

The token went live alongside the project’s mainnet release on Thursday. Users who «mined» tokens by clicking their smartphone screens once a day were finally able to transfer and sell tokens.

Zhou, however, found himself in the middle of a separate issue on Friday, with his exchange Bybit, which was hacked by North Korea’s Lazarus Group for $1.5 billion.

The PI token debuted on OKX at $0.67, rose as high as $2 and then slumped 65% and is currently around $0.69.

One issue that raised concerns was a marketing tactic that rewarded users who recruited other users. Each time a user persuaded someone else to sign up using their code, the first person’s «mining» rewards were increased. The idea had some drawing comparisons to the 2017 Ponzi scheme, Bitconnect.

«Pi Network is the biggest ponzi [scheme],» X user CryptoBeast alleged, posting to their 656K followers.

The project also offers users the option of locking their tokens for as long as three years. In return, they are promised increased rewards. The same technique was at the heart of the Hex project, whose founder, Richard Schueler, known online as Richard Heart, is a fugitive sought by the U.S. Securities and Exchange Commission (SEC) for, among other things, defrauding his investors.

The token has a market cap of $4.18 billion based on a circulating supply of $6.33 billion. However, its inflationary nature means the maximum supply is 100 billion, giving a fully diluted value (FDV) at a staggering $67 billion, assuming it holds the current price. At launch, FDV rose as high as $200 billion, almost double that of Solana.

Some exchanges have been undeterred by the concerns raised. OKX, Bitget and Gate have racked up a total of $620 million in trading volume for PI trading pairs between them, according to CoinMarketCap.

Read more: Pi Network’s Token Debuts at $195B Value Despite Minimal Liquidity

Blockchain analytics firm Arkham Intelligence said North Korea’s Lazarus Group was behind Bybit’s $1.46 billion hack.

In an earlier post on social media platform X, Arkham offered a bounty of 50,000 ARKM tokens for anyone who could identify the attackers for Friday’s hack. Later, the platform said onchain sleuth ZachXBT submitted «definitive proof» that the attackers were the North Korean hacker group.

«His submission included a detailed analysis of test transactions and connected wallets used ahead of the exploit, as well as multiple forensics graphs and timing analyses,» the post said.

Read more: Bybit Loses $1.5B in Hack but Can Cover Loss, CEO Confirms

The hack that rocked the crypto market and saw most prices tumbling was called the «largest crypto theft of all time, by some margin,» by Elliptic’s Tom Robinson, co-founder and chief scientist. «The next largest crypto theft would be the $611 million stolen from Poly Network in 2021. In fact it may even be the largest single theft of all time.»

Blockchain data provider Nansen told CoinDesk that the attackers first withdrew nearly $1.5 billion worth of funds from the exchange into a main wallet and then spread the funds across several others.

«Initially, the stolen funds were transferred to a primary wallet, which then distributed them across more than 40 wallets,» Nansen said. «The attackers converted all stETH, cmETH, and mETH to ETH before systematically transferring ETH in $27 million increments to over 10 additional wallets,» Nansen said.

The attack appeared to have been caused by something called «Blind Signing,» where a smart contract transaction is approved without the comprehensive knowledge of its contents.

«This attack vector is quickly becoming the favorite form of cyber attack used by advanced threat actors, including North Korea,» said blockchain security firm Blockaid’s CEO Ido Ben Natan. «It’s the same type of attack that was used in the Radiant Capital breach and the WazirX incident.»

«The problem is that even with the best key management solutions, today most of the signing process is delegated to software interfaces that interact with dApps. This creates a critical vulnerability — it opens the door for malicious manipulation of the signing process, which is exactly what happened in this attack,» he said.

Bybit CEO Ben Zhou wrote earlier on X that a hacker «took control of the specific ETH cold wallet and transferred all the ETH in the cold wallet to this unidentified address.» He also confirmed that the exchange «is solvent even if this hack loss is not recovered.»

Oliver Knight contributed to the reporting of this story
Read more: Bitcoin, Ether Slump as Crypto Prices Dip on Report of Massive $1.5B Bybit Hack

Only a handful of hours ago crypto markets were buoyed as the Securities and Exchange Commission signaled its intent its dismiss a lawsuit against Coinbase (COIN).

The welcome regulatory news sparked 5% gains for COIN and the likes of increasingly important crypto trading platform Robinhood (HOOD), and sent bitcoin (BTC) breaking out of its recent tight trading range to within sight of the $100,000 level.

The first bomb to break the good vibes came late in the U.S. morning when Bybit was stung by about a $1.5 billion hack — the largest such exploit ever in crypto. That news sent bitcoin and ether (ETH) sliding roughly 2% in a manner of minutes.

Prices quickly seemed to stabilize and — at least in the case for bitcoin — bounce a bit.

Et tu stocks?

Any sort of bounce, however, was quickly snuffed out as modest losses for U.S. stocks began to accelerate in afternoon trading.

Among the excuses for the quick retreat was a poor reading from the Michigan Consumer Sentiment Index, which unexpectedly slipped to 64.7 versus forecasts for 67.8. The same survey’s inflation expectations rose to 3.5% against an expected 3.3%.

An outlier, but perhaps also a reason for selling, was a new coronavirus scare out of China. Discovered by researchers at the Wuhan Institute, HKU5-CoV-2 is «strikingly similar» to the virus that caused the 2020 pandemic, according to the Daily Mail.

Shortly before the close of trading on Friday, the Nasdaq is lower by 2.2% and the S&P 500 by 1.7%. The 10-year U.S. Treasury yield has fallen nine basis points to 4.42%.

As for crypto, bitcoin has more than erased its gains of the past couple of days, trading back to $95,000 and lower by nearly 4% over the past 24 hours. Ether (ETH) has pulled back to $2,650, also lower by about 4%. The broader CoinDesk 20 Index is down 4.4%.