The price of Pepe (PEPE) tumbled over 18% Friday after the meme coin’s team transferred almost 4% of its total supply to exchanges without warning, igniting fears of a potential rug pull.
PEPE’s all-important multi-sig wallet sent around $16M worth of PEPE tokens to three centralized cryptocurrency exchanges and one unverified wallet. Data indicates that $8.2 million in Pepe was sent to OKX, $6.5 million to Binance, and $434,000 to Bybit, while an additional $400,000 was transferred to an unknown address.
Moreover, there was a significant change in the multi-sig wallet’s security parameters. PEPE developers have reduced the number of signatures required to sign off on whether or not the wallet should make transfers. Initially, the requirement was 5 out of 8 signatures (5/8). However, the wallet now only requires two out of eight signatures as of August 24.
It’s worth noting that this movement of assets marked the first time that Pepe tokens had ever been sent from the project’s multi-sig wallet to centralized exchanges. The reasons for the transfers and the alteration of signature requirements nonetheless remain unknown as the PEPE team has not made any announcements.
The multi-sig wallet still holds approximately 10.697 trillion PEPE tokens worth $9.61 million.
PEPE, the token that sprouted out of the “pepe the frog” meme, rocketed to a market cap of over $502 million after an impressive 2,000% climb since its launch in late April. As the hype around PEPE continued to build, some observers even suggested the frog-based meme coin had the potential to unseat the OG memecoin, Dogecoin (DOGE). However, the multi-million-dollar token transfers now make the project questionable.
PEPE tanked after the news emerged on social media, down 18.0% as of publication time. The token’s market capitalization lost $100 million from $444.4 million to as low as $343 million as the massive transfers with no official communication from the team triggered panic selling.
“Although profit taking in crypto is normal from a team’s perspective, the suddenness [and] obscurity of the transactions, coupled with the lack of communication raises some red flags,” crypto strategist Miles Deutscher posited.