Pepe (PEPE) Memecoin Loses 13% Value Amid Altered Multi-Signature Wallet

A sudden drop in value sent the popular memecoin Pepe (PEPE) tumbling by 13% on Thursday. The crypto community raised concerns after noticing significant changes to the multi-signature wallet used to support the token’s adoption.

Modified Wallet Threshold Raises Red Flags

As observed by @Crypto_Noddy on X, the multi-signature wallet’s threshold for token transfers went from requiring 5 out of 8 wallet signatures to just 2 out of 8. This change deviates from the standard practice of storing reserves for popular coins, causing alarm among investors and enthusiasts.

The multi-signature wallet is designed to reserve a portion of Pepe’s supply for future exchange listings, liquidity pools, and bridges. The alteration of the threshold raises concerns about the availability of liquidity and the intentions behind the changes made to the wallet.

ZachXBT, an onchain sleuth, corroborated the findings, revealing that the wallet had transferred $15.6 million worth of PEPE tokens to various exchanges, including Binance, OKX, and Bybit. The remaining balance in the multi-signature wallet accounts for 3.8% of the token’s total supply ($10.4 million).

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

Potential Security Concerns

The analyst pointed out the risks associated with holding unlocked PEPE tokens in a multi-signature wallet with unknown signers. This arrangement allows the token holders to sell their tokens at any time, potentially causing significant market volatility.

While it’s possible that all the wallet signers already belong to the same two individuals, it remains uncertain without further confirmation. Compromised keys have been at the center of major DeFi hacks in the past, including the $600 million Ronin Bridge hack, which stands as the largest DeFi hack in history.

Current Performance and Price

Following the incident, PEPE is currently trading at $0.0000009472, representing a 13.74% decline within the day and a 29.61% decrease from the previous month. The altered multi-signature wallet’s impact on the token’s value and overall market sentiment remains to be seen.

About Pepe (PEPE)

Pepe (PEPE) is a memecoin that gained significant popularity in recent times. Based on a popular internet meme, Pepe aims to create a fun and engaging cryptocurrency community while leveraging its memetic appeal. Investors are drawn to the meme-inspired nature of the project, hoping to capitalize on the trend and potentially generate substantial returns.