Hybrid gambling, memecoin and decentralized finance project Mpeppe (also known as MPEPPÉ or MPEPE) is being accused of orchestrating a fake presale after several investors allegedly paid for coins but didn’t receive them.
The project claims that funds will be used to build a casino, collection of player card non-fungible tokens (NFTs), and decentralized finance (DeFi) protocol associated with the token. Blockchain data shows that the token’s entire supply is held by its deployer account and that no tokens have been given to investors.
There are several different projects with similar names to Mpeppe, including an unrelated one originally called Micro Pepe, which has an identical ticker symbol to this one. However, the project discussed here is advertised on mpeppe.io, which is currently listed at the top of Google Search results for the name.
Coinpectra was contacted by an investor who went by “Chosen” and spoke on the condition that their real name not be revealed.
Chosen claimed they sent $1,996 worth of the USDT USDT $0.9995
stablecoin to the project’s deposit address, but the project did not give them any tokens in exchange.
According to the investor, they originally discovered the project after seeing a promotion on a crypto media site while browsing a news aggregator aimed at crypto investors.
Chosen said they trusted this news aggregator service, which is why they believed Mpeppe was a legitimate project.
Coinpectra contacted the Mpeppe team through its official Telegram channel to get its side of the story. However, after posting several questions to the group, it immediately started producing a “sorry, this group is not accessible” error message.
The reporter could not confirm whether they had been banned from the group or whether some technical malfunction had occurred. The error occurred less than a second after they posted several questions to the group’s admins.
Other unofficial Mpeppe channels also contain complaints from users that they deposited funds but did not receive tokens.
The official Mpeppe website contains a “buy $MPEPE” button. When users click this button, they are asked to “log in” or “sign up.” Users are then asked for multiple pieces of personal information, including an email address and phone number. Most crypto projects do not require this information for token sales.
After providing this information, the user is taken to a dashboard that includes a “Buy Now” button.
The “Buy Now” button allows the user to select the coin they want to pay with and enter the amount they wish to provide. The user interface responds by displaying the amount of Mpeppe the user is supposed to receive for the amount deposited. For example, entering “50” as the amount of USDT to be provided results in “28,137.3100732 MPEPE” being displayed.
If a user enters this information and then presses “Pay With Crypto,” the page does not push a transaction to the user’s wallet. Instead, it produces a QR code and crypto address, which the user is asked to manually send funds to, similar to how a centralized exchange would ask for a deposit.
The deposit address is an externally owned account under the control of a person. There is no smart contract controlling the presale process nor a blockchain-based automated mechanism for delivering tokens to the buyer. Instead, buyers can only receive tokens if the person controlling the deposit address sends those tokens to them.
Mpeppe does not ask for the buyer’s crypto address during the signup process. So, presumably, a buyer who sent their funds from a centralized exchange would need to provide this information at a later date if they have any hope of receiving tokens.
Related: Unofficial GameStop memecoin’s $4M token presale draws investor controversy
The transaction data for Chosen’s $1,997 deposit sheds further light on what may be happening to investors’ funds. Chosen sent funds to an address ending in D4e8. From there, the recipient sent them to another address ending in A623.
This A623 address contains over $450,000 worth of tokens and has performed over 33,000 transactions. It frequently makes deposits to Coinbase, ChangeNOW, and BitMEX, presumably to cash out or exchange tokens, and has also transferred funds to user “Emdek23” on OpenSea, Arkham Intelligence data shows.
According to the Mpeppe website, the token’s official contract is located at an address ending in cA7B. Blockchain data shows that the token was created on June 16 with a total supply of over 7.6 billion. The entire supply was sent to the deployer account, and none has moved since that date. Consequently, no investors who purchased the tokens have received them.
Mpeppe’s white paper claims that its team will use the presale funds to develop a casino, player card NFTs, and a DeFi protocol that will allow users to stake their Mpeppe tokens.
Mpeppe may be planning to distribute tokens at a later date, possibly by asking investors for their crypto addresses through telephone calls or email addresses, as these pieces of information are required to purchase the token.
However, readers should be aware that Mpeppe’s presale practices are unusual, which may indicate that the team is planning to execute an exit scam. Presale tokens are usually sold through a smart contract and distributed automatically to buyers’ crypto addresses. But in this case, the team asks for deposits to be sent to an externally owned account. This means there is no automatic guarantee that the user will receive tokens at all. Indeed, so far, no investors have received tokens in exchange for the funds they have sent.
In addition, the Mpeppe team is pseudonymous, making it virtually impossible to pursue them through legal channels if they never deliver the tokens or build the casino, NFTs, etc. Because the app asks for personal information, the user also runs the risk of receiving spam emails or phone calls as a result of its use.
This does not prove that Mpeppe is a scam. It’s possible that the team will deliver the tokens at a later date and keep users’ personal information private. However, users should be aware of the risk if they choose to interact with the Mpeppe app.
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