Fear of Rug Pull Causes PEPE to Dump by Over 15% - Excerpts

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Changes to a multi-sig wallet and new token transfers within the PEPE crypto raised fears of a developer “rug pull,” causing the PEPE token to dump at a quick pace.

While PEPE has partially recovered, it hasn’t fully regained its prior price level after the news.

$16 Million Worth of PEPE Tokens Were Transferred

The community was alerted through various channels and social media that $16 million worth of Pepe tokens were moved from the developers’ multi-sig wallet to different crypto exchanges on August 24th. The news swiftly resonated within the memecoin community, resulting in PEPE’s price dropping from around $0.000001 to approximately $0.00000081 within less than 24 hours.

1/4

1 hour ago, the Pepe multisig wallet, changed the amount of signatures required on their multisig from a 5/8 to 2/8. This comes after sending $15.7 million worth of $PEPE to exchanges.

A breakdown of what we know: pic.twitter.com/bxBxp6Nzqz

— ASXN (@asxn_r) August 24, 2023

This sudden price decline surprised the broader community, prompting several analysts and research pages to cover the development. According to AXSN, a Boutique Digital Asset Research entity, the multi-sig wallet initially received funds from Binance and subsequently sent Pepe tokens to various destinations. $8.36 million worth of tokens were sent to OKX, $6.6 million to Binance, $438,000 to Bybit, and $400,000 to an unknown exchange/wallet. After these transfers, only around $10.42 million worth of $PEPE remained in the multisig.

Such unusual activity often raises suspicions of a “rug pull” within the crypto community. A rug pull is a scam where developers hype a cryptocurrency or NFT project to attract investment, only to abruptly vanish, taking investors’ assets along. The term originates from the metaphor “pulling the rug out” from under someone, leaving them off-balance and scrambling. The attention around this project prompted responses from numerous prominent figures.

Lmfao I love the blockchain. The moment $Pepe devs moved the threshold for their multi sig to 2 (to rug ?) that shit was such a gift of a short ….

Just follow the chain …. It’s all transparent pic.twitter.com/6ymN4S2IyU

— Wizard Of SoHo (🍷,🍷) (@wizardofsoho) August 24, 2023

A notable crypto trader, @wizardofsoho, tweeted on their social media page, “Lmfao I love the blockchain. The moment $Pepe devs moved the threshold for their multi-sig to 2 (to rug ?) that shit was such a gift of a short ….” According to data, approximately 3.8% of the total PEPE supply was sent to the mentioned entities. Overall, a mysterious transfer of 16 trillion PEPE tokens occurred, triggering doubts within the community.

Wallet Signatures Required Were Suspiciously Reduced

A considerable number of investors were intrigued by this aspect, as indicated by the multitude of posts on various social media platforms. In essence, the PEPE wallet originally mandated five out of eight signatures for inter-wallet transfers. However, not long before these events, the requirement was altered to just two out of eight signatures. Interestingly, this also marked the inaugural instance of Pepe tokens being transferred from the project’s multi-sig wallet to exchanges.

Current Price of PEPE

At the time of writing, the PEPE token has maintained its price stability at approximately $0.000009 and has experienced a remarkable 300% surge in trading volume. The fact that the price has remained steady despite this heightened trading activity could suggest that investors still have faith in the project’s legitimacy.

This may be a positive sign for current PEPE holders. Earlier this month, PEPE had already undergone a significant decline from its level of $0.000014 to around $0.00001. However, the recent incident caused the price to dip further, reaching as low as $0.0000081 before staging a recovery.

Will This Negatively Impact the PEPE Crypto in the Long Term?

Although the news has raised concerns among many community members, it hasn’t led to a substantial decline in the value of PEPE. This implies that the project might still retain trust of its holders and community. However, the forthcoming days will hinge greatly on how the developer team addresses and manages this situation. Their response will play a pivotal role in shaping the potential price trajectory of the token.