Pepecoin's $15M Loss: Allegations of Internal 'Bad Actors' and the Stolen PEPE Tokens

Unusual activities originating from a multisig wallet sent ripples through the Pepecoin community over the past week.

As per a statement by an individual claiming control on X (formerly Twitter), a faction of rogue developers within the Pepecoin team orchestrated extraordinary transfers from the token's multisig wallet. This move allegedly resulted in the embezzlement of millions of dollars' worth of Pepe coin (PEPE). The developer elaborated that internal disputes and egotism had tainted the project since its inception, prompting most of the initial team members to distance themselves within a week of the project's launch.

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

In a surprising turn of events, over 16 trillion Pepe tokens, equivalent to $15 million, were illicitly transferred to crypto exchanges such as OKX, Binance, Kucoin, and Bybit, where they were subsequently liquidated. This series of events contributed to an almost 20% plunge in the valuation of the frog-themed tokens.

Analysts had earlier voiced concerns regarding Pepecoin's early trading patterns and the absence of retail traders. The susceptibility of the market to price manipulation due to a concentration of tokens in a few hands had been highlighted. These warnings underscored the vulnerability of PEPE's stability, given that a small cluster of large-scale investors held substantial proportions of the token.

Perennial Alarm Bells

The current developer at the helm of the project expressed remorse on X, outlining plans for the project's expansion and eventual decentralization in the upcoming months. They disclosed ongoing negotiations for the acquisition of web domains and usernames for PEPE, with the intention of burning the remaining multisig tokens once these transactions conclude. "Burning" tokens entails their permanent removal from circulation.

Despite achieving remarkable success in 2023, with its market capitalization peaking at $1.8 billion in mid-May, Pepecoin was shadowed by concerns pertaining to token distribution and the potential for market manipulation.