Three members of the Pepecoin team withdrew about 4% of the total PEPE tokens worth $16 million from the crypto wallet and left the project. The crypto community suspected Rug Pull and initiated the involvement of law enforcement agencies to deal with the incident, accusing the project developers of insider trading.
On August 24, 16 trillion PEPE tokens were withdrawn from the cryptocurrency wallet belonging to the Pepecoin project, Safe Global reported. 3.8% of the total volume of tokens were moved to three crypto exchanges for further sale and to an unidentified wallet address.
PEPE tokens, whose value at the time of transfer amounted to $15.7 million, were transferred to:
- OKX — $8.2 million;
- Binance — $6.5 million;
- Bybit — $434,000;
- an unknown wallet — $400,000.
Shortly after the funds were transferred, the functionality of the project’s wallet was changed. The wallet previously required a minimum of five out of eight multisignatures to confirm an operation, and now it requires only two, Etherscan says.
At the time of the withdrawal of funds, the Pepecoin address had about $10 million worth of PEPE left, so the attackers withdrew approximately 60% of the tokens. Rumors of a possible Rug Pull scheme began circulating in the crypto community, and PEPE quotes instantly collapsed by 15%.
On August 25, one of the anonymous founders of the project presented the official version of what was happening to the community. According to a statement on X, three team members stole funds from the cryptocurrency wallet and then left the project, handing over full control to the remaining participant, who claims to have known nothing about the colleagues’ intentions. The individual was also quick to assure the community that the remaining 10 trillion PEPE is completely safe, as is the X account, while noting that the Telegram account had been compromised.
The post also emphasized that the participants who committed the theft and left the project have been hindering the development of Pepecoin in every way possible since its launch in April. The remaining developer assured that he intends to continue to act solely in the interests of the community, as now no one will disturb him.
However, the crypto community expressed some skepticism about the developer’s sincerity. Thus, a member of the PEPE community accused the project team of insider trading. He said that about $17 million in PEPE tokens were stored on nine wallets belonging to the project team and they were actively creating short positions on CEXs. Personal information about some of the Pepecoin team members and their transactions was also revealed. His words were confirmed by an independent on-chain analyst, who released a number of data showing that insider trading through wallet addresses belonging to PEPE developers continues. He called on Binance and OKX to discourage transactions from insider addresses in every way possible and to enlist law enforcement officials to participate in catching the attackers.
However, some members of the Pepecoin community apparently decided to take advantage of the asset’s falling value. According to Lookonchain, one of the project’s whales bought 640 billion PEPE, spending 320 ETH (~$529,000) on the purchase. The average token price at the time of purchase was $0.000001163. According to CoinMarketCap, the value of PEPE as of 13:00 (GMT+3) on August 28 is $0.0000008705.
Due to the PEPE rally from April to May, the meme coin market has shown strong growth in the first half of 2023.
