The Pepecoin (PEPE) community was thrown into turmoil following the unauthorized withdrawal of 16 trillion PEPE tokens, valued at approximately $16 million, from the project’s multisig wallet. The incident occurred on August 24, 2023, and led to a precipitous 15% drop in the value of PEPE tokens. The tokens were subsequently transferred to multiple cryptocurrency exchanges, including OKX, Binance, Kucoin, and Bybit, raising concerns of a potential “rug pull” among investors and stakeholders.
The inside job: Rogue team members and multisig wallets
The Pepecoin project, launched in April 2023, had set up a multisig wallet requiring a minimum of 3 out of 4 signers for any transaction approval. However, three former team members allegedly exploited this system.
According to official statements, these individuals logged into the multisig wallet, withdrew 60% of the total 26 trillion tokens, and transferred them to various exchanges. Following the unauthorized transactions, they removed themselves from the multisig wallet, deleted their social media accounts, and left a message stating that the remaining team member was now in “full control” of the project.
an announcement to the $PEPE community: Yesterday on August 24th, 2023, a series of unexpected transactions took place from the $PEPE multisig CEX Wallet in which ~16 Trillion $PEPE tokens (worth roughly $15m USD) were transferred to various crypto exchanges (OKX, Binance,… pic.twitter.com/iZmXV1TAvw
— Pepe (@pepecoineth) August 26, 2023
The incident has exposed the internal strife that has plagued Pepecoin since its inception. Reports indicate that the project had been hindered by disagreements and conflicts among team members, some of whom were described as having “large egos and avarice.” These individuals had reportedly separated themselves from the project within the first week, slowing down progress by refusing to sign off on decisions and going unresponsive for extended periods.
The aftermath: Community reactions and future plans
In the wake of the scandal, the remaining Pepecoin team members took to social media platforms to provide clarification and assure the community of the project’s ongoing commitment. The remaining 10 trillion PEPE tokens in the multisig wallet are reportedly secure and will be transferred to a new wallet. Plans are also in place to acquire web domains and usernames for Pepecoin, and there is an intention to burn the remaining tokens once these acquisitions are complete.
Despite the setback, the price of PEPE tokens has shown signs of recovery, increasing by nearly 4% in the last 24 hours. The market cap also rose by 3.5% to approximately $352.98 million, according to CoinMarketCap.
The official Pepecoin Telegram group remains locked due to hacking concerns, and the primary channel of communication has shifted to the @pepecoineth Twitter account.
In conclusion, the incident has served as a cautionary tale for the broader cryptocurrency community, emphasizing the need for stringent security measures and transparent governance. The remaining Pepecoin team member has expressed a commitment to steering the project toward a decentralized and anti-fragile future, even as questions linger about the veracity of the official statements. The rapid sale of most, if not all, stolen tokens on OKX and Binance exchanges has been confirmed, and measures are being taken to prevent further misuse of the project’s assets.
