$PEPE: $15 million theft shakes crypto community

The Pepe token ($PEPE) has found itself at the center of an internal upheaval that led to a significant breach of trust. Around 16 trillion $PEPE tokens with an estimated value of approximately $15 million were unlawfully acquired and subsequently moved to various cryptocurrency exchanges last week.

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

“Yesterday, these three ex-team members resurfaced, circumvented the system, made off with 16 Trillion, which constitutes 60 percent of the 26 trillion multi-sig tokens, and sent them off to exchanges for sale,” the individual wrote on August 26.

Subsequently, these former team members purportedly detached themselves as signers from the wallet and deactivated their social media accounts.

The actions of the former Pepe team members catalyzed a substantial 16 percent drop in PEPE’s price, raising concerns among investors and traders.

the 10.6 Trillion tokens left in the $PEPE multisig have just been transferred to a new address: 0x9f5E46E4990dee30665b2e803BA134564D1e087F

txn: https://t.co/ONa5se54YU pic.twitter.com/f5e0KyCCBa

— Pepe (@pepecoineth) August 26, 2023

Retaining value

Pepe has garnered widespread attention since its initial launch in April, undergoing a rise of over 1,500 percent in May alone and reaching a peak market capitalization of $1.5 billion.

Although the token’s value experienced a subsequent decline, the 15 most substantial Pepe holders initially amassed paper profits collectively exceeding $90 million.

The stolen tokens correspond to approximately four percent of the entire supply. On the flip side, the remaining balance within the multi-sig wallet accounts for roughly 10 trillion tokens, equivalent to about two percent of the overall supply.

https://twitter.com/kekpunksxyz/status/1695330238232695114

According to the final controller of the multi-sig system, the stolen tokens were promptly dispatched to exchanges such as OKX, Binance, Kucoin, and Bybit and subsequently liquidated. In response, the number of multisig signers was curtailed from 5/8 to 2/8, as unveiled in a late Friday announcement.

Multisig configurations are frequently employed in the cryptocurrency industry to bolster security, as they necessitate the consensus of multiple team members through their digital signatures for transaction authorization.

The list of insiders in this post have started selling $PEPE 50 minutes ago.

400 billion $PEPE have already been sold mainly from this address:
0x22f6215b40434D9135B06f1C676fd9291936Aac3

You can trace their activity here:https://t.co/BYMz8cfrFE https://t.co/k0KCpeHTyR

— Yazan (@YazanXBT) August 26, 2023

Reassurance from the last remaining founder

In the face of these developments, the token’s last remaining founder extended assurance to the Pepe community, emphasizing the project’s commitment to rooting out malicious actors and forging ahead with renewed optimism.

They also clarified their continued control over the project’s X account, the multi-sig wallet, and the 10 trillion tokens enclosed within, as well as disclosed that the surviving tokens had been transferred to a new address.

TLDR: They transferred out $15.6M worth of PEPE from the multisig to an EOA address. That address started depositing the funds to exchanges.

Then they changed the number of signers on the multisig from 5 -> 2 suddenly (bad security choice).

— ZachXBT (@zachxbt) August 24, 2023

The individual further divulged ongoing dialogues with influential figures within the cryptocurrency community aimed at soliciting guidance for the project’s forward journey. This transparency from the founder was met with a positive reception, catalyzing an impressive increase of over 11 percent in PEPE’s price.

However, skepticism arose regarding the developer’s narrative, with some speculating that the anonymous developer might have wielded multiple accounts to orchestrate the scheme. Critics have pointed out inconsistencies in the developer’s assertion that only one signer remained for the multi-sig wallet when records indicated the threshold had been updated to 2/8 signers.

$6.5M of PEPE to Binance
$8.2M of PEPE to OKX
$434k of PEPE to Bybit
$389K of PEPE to another address

— ZachXBT (@zachxbt) August 24, 2023

Despite these developments, PEPE managed to stage a 2.3 percent rebound in the past 24 hours, and its market capitalization currently stands at $350 million.