PEPE Multisig Changes Spark Rug Pull Fears

Rug pulls are common at the best of times in the DeFi space, but memecoins offer scammers one of the most effective ways of extracting money from traders. Only recently, traders on Coinbase's new Base L2 platform found this out the hard way, when liquidity for the BALD memecoin was pulled without notice: A $6 million P&D.

PepeCoin: The New Memecoin In Town

There are plenty of memecoins around, but most of them last just a few days or weeks, at most. PepeCoin (PEPE), a memecoin created around the frog meme popular within the crypto community, appeared to be something different.

Launched in April this year, Pepe soared to a peak market cap of $1 billion, and appeared to have staying power, with a dedicated community and support from major exchanges. After a short-lived "memecoin season" ended (mostly in tears), PEPE was still standing.

Today, though, all is not well. Large transactions from the team's wallet, and changes to the wallet's multisig conditions, suggest something sinister is afoot. A rug pull or potentially even a hack: At the moment, it's unclear.

What Happened?

Community members noticed a series of huge PEPE transfers from the team multisig wallet to multiple CEXs yesterday. 16 trillion PEPE were sent, out of a total supply of 420 trillion. This was the first ever transfer out from the wallet, and the amount, in itself, is a red flag. But there was more.

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

Shortly afterwards, the terms of the multisig were updated. Instead of requiring 5-of-8 signatures, the number was reduced to 2-of-8.

These moves were unannounced, making them even more suspicious. It also calls into question how secure the multisig wallet has ever been, and whether one single actor holds more than one (or even all) of the keys.

Did the PepeCoin team split? Did some of its members take their share of the coins and disappear, leaving the remaining members in control of the wallet?

Doubtless more information will come to light soon. In the meantime, though, there have been no updates from the official Twitter account, and the Pepe community is understandably concerned.

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