White paper drafted under the European Markets in Crypto-Assets Regulation (EU) 2023/1114 for FFG M2HDQ5QB5

The crypto-asset PEP referred to in this white paper is a crypto-asset other than EMTs and ARTs and is deployed on the Pepecoin blockchain, according to the DTI FFG shown in section F.14, as of 2026-03-23. The supply of the crypto asset is unlimited. Currently, 10,000 PEP are mined approximately every minute, as PEP is the native crypto asset of the Pepecoin blockchain, which is a proof of work network. The first activity on Pepecoin can be viewed on 2024-01-30 (block hash: cadd9044a75af21779b0f52cc1fe647edb65c4be797b92705e8e82b22f8c3800, source: https://pepeblocks.com/block/cadd9044a75af21779b0f52cc1fe647edb65c4be797b92705e8e82b22f8c3800, accessed 2026-03-23).

Pepecoin is a decentralised layer 1 blockchain network with its own native ledger and does not operate through a smart contract deployed on another network. The project is based on a code fork of Dogecoin and uses a proof of work model for transaction validation and block production. The network was launched as a new chain at block height 0 and is designed to function as an independent blockchain rather than as a token within Web3 infrastructure or a contract-based application.

The crypto-asset PEP is used as the native crypto-asset of the Pepecoin network. It is required for the payment of network transaction fees and is issued through mining under the network’s proof of work mechanism. The crypto-asset may also be mined through merged mining alongside Litecoin and Dogecoin, as described in the project materials.

The crypto-asset does not grant any legally enforceable or contractual rights or obligations to its holders or purchasers. Any functionalities accessible through the underlying technology are purely technical or operational in nature and do not confer rights comparable to ownership, profit participation, governance, or similar entitlements known from traditional financial instruments.

As defined in Article 3(9) of Regulation (EU) 2023/1114 of the European Parliament and of the Council of 31 May 2023 on Markets in Crypto-Assets – amending Regulations (EU) No 1093/2010 and (EU) No 1095/2010 and Directives 2013/36/EU and (EU) 2019/1937 – a utility token is “a type of crypto-asset that is only intended to provide access to a good or a service supplied by its issuer”. This crypto-asset does not qualify as a utility token, as its intended use goes beyond providing access to a good or a service supplied solely by the issuer.

Pepecoin LLC is seeking admission to trading on the Payward Global Solutions LTD (“Kraken”) platform in the European Union in accordance with Article 5 of Regulation (EU) 2023/1114 of the European Parliament and of the Council of 31 May 2023 on Markets in Crypto-Assets, amending Regulations (EU) No 1093/2010 and (EU) No 1095/2010 and Directives 2013/36/EU and (EU) 2019/1937. The admission to trading is not accompanied by a public offer of the crypto-asset.

Pepecoin LLC is engaged in administrative, contractual, and intellectual property-related functions in connection with the Pepecoin project. Its activities include the management of trademark-related matters and the handling of certain corporate-administrative and contractual tasks.

Not applicable. The company has been established for less than three years and its financial condition over the past years is provided in Part A.17 below.

The Pepecoin LLC is a pure holding company with correspondingly limited financial resources. The company has limited share capital and does not generate any material revenues, nor does it maintain significant cost structures. No financing rounds, external funding, or public grants have been conducted or received to date.

Pepecoin is intended to function as a decentralised, public, and permissionless Layer 1 crypto-asset operating on its own blockchain network rather than as a token issued on another chain. The network is designed so that any participant may run a node, broadcast transactions, verify blockchain data, and interact with the protocol under the technical rules of the network. Pepecoin is a code fork of Dogecoin and retains a similar blockchain-based architecture, while using network-specific parameters such as Pepecoin-denominated addresses and protocol adaptations implemented through the Pepecoin Core software.

The Pepecoin network is secured through a Proof-of-Work consensus mechanism using the Scrypt hashing method. Within this model, network participants engaging in mining validate transactions and contribute to block production in accordance with the protocol rules. Auxiliary Proof of Work (AuxPow) or merged mining begins at block 42,000, reflecting a technical design intended to support merged-mining style security characteristics. As a native crypto-asset of the chain, PEP is intended to serve as the on-chain asset used for value transfer across the network and for the settlement of transaction fees required for the processing and inclusion of transactions in blocks. Transaction fees on the network are denominated and paid in the native crypto-asset itself.

Pepecoin follows a mining-based issuance model. During the first 600,000 blocks, approximately 100 billion Pepecoin were intended to be mined, after which each block awards 10,000 PEP. At an approximate target of one block per minute, this results in continued issuance of new units over time rather than a fixed maximum cap. In this respect, the crypto-asset is designed to remain transferable across the public network while also functioning as the asset in which miner rewards and transaction-related economic incentives are denominated.

This section provides an overview of the historical developments related to the PEP crypto-asset and a description of planned or anticipated project milestones as publicly communicated. All forward-looking elements are subject to significant uncertainty. They do not constitute commitments, assurances, or guarantees, and may be modified, delayed, or discontinued at any time. The implementation of past milestones cannot be assumed to continue in the future, and future changes may have adverse effects for token holders. There is no formally published multi-year roadmap for the PEP crypto-asset.

Past milestones:

- Launch (30 January 2024): Pepecoin launched its own blockchain on 30 January 2024.

Future milestones:

- Expansion of Online Donation and Transfer Use Cases: Pepecoin is intended to support broader adoption for online donations and peer-to-peer transfers, including by content creators and other persons with social media followings.

Note: All future milestones are subject to significant uncertainty, including but not limited to technical feasibility, regulatory developments, market adoption, and community governance decisions. The project may modify, delay, or discontinue any of these initiatives at any time. Past implementation or performance outcomes do not constitute an indication of future results, and any such changes may materially affect the characteristics, availability, or perceived value of the PEP crypto-asset for its holders.

Pepecoin was launched as a fair-launch Proof-of-Work blockchain, implemented as a code fork of Dogecoin, with no premine, no pre-allocation, no ICO, and no disclosed venture, seed, or private funding rounds. PEP tokens are generated exclusively through ongoing block rewards to miners rather than through issuer-controlled token allocations. Accordingly, no financial or token-based resources have been allocated by Pepecoin LLC or any issuer entity to the project in the form typically described under Section D.9.

Not applicable, as this white paper serves the purpose of admission to trading and is not associated with any fundraising activity for the crypto-asset project.

The purpose of seeking admission to trading is to enable the crypto-asset to be listed on a regulated platform in accordance with the applicable provisions of Regulation (EU) 2023/1114 and Commission Implementing Regulation (EU) 2024/2984. The white paper has been drawn up to comply with the transparency requirements applicable to trading venues.

Holder restrictions are subject to the rules applicable to the crypto-asset service provider, as well as any additional restrictions that provider may impose.

The costs involved in accessing the trading platform depend on the specific fee structure and terms of the respective crypto-asset service provider. These may include trading fees, deposit or withdrawal charges, and network-related gas fees. Investors are advised to consult the applicable fee schedule of the chosen platform before engaging in trading activities.

Not applicable, as this white paper is written to seek admission to trading, not for the initial offer to the public.

Not applicable, as this white paper is written to seek admission to trading, not for the initial offer to the public.

MiCA-compliant Crypto Asset Service Providers shall have strong measurements in place in order to manage conflicts of interests. Due to the broad audience this white-paper is addressing, potential investors should always check the conflicts of Interest policy of their respective counterparty.

Not applicable, as this white paper is written to seek admission to trading, not for the initial offer to the public.

Not applicable, as this white paper is written to seek admission to trading, not for the initial offer to the public.

PEP is intended to serve as the on-chain asset used for value transfer across the network and for the settlement of transaction fees required for the processing and inclusion of transactions in blocks. Transaction fees on the network are denominated and paid in the native crypto-asset itself.

The PEP crypto-asset does not confer ownership, profit participation, governance rights in or over the issuer or any related entity, or any form of economic entitlement. All functionalities are technical in nature and relate exclusively to interactions within the Pepecoin protocol environment. The actual usability of PEP depends on factors such as system stability, development progress, governance decisions, and the operational conditions of the Pepecoin Network, which are outside the control of token holders.

Future milestones:

- Expansion of Online Donation and Transfer Use Cases: Pepecoin is intended to support broader adoption for online donations and peer-to-peer transfers, including by content creators and other persons with social media followings.

Note: All future milestones are subject to significant uncertainty, including but not limited to technical feasibility, regulatory developments, market adoption, and community governance decisions. The project may modify, delay, or discontinue any of these initiatives at any time. Past implementation or performance outcomes do not constitute an indication of future results, and any such changes may materially affect the characteristics, availability, or perceived value of the PEP crypto-asset for its holders.

The crypto-asset referred to herein is a crypto-asset other than EMTs and ARTs, and is available on the Pepecoin blockchain network. The crypto-asset is fungible up to 8 digits after the decimal point. The crypto-asset constitutes a digital representation recorded on distributed-ledger technology and does not confer ownership, governance, profit participation, or any other legally enforceable rights. Any functionalities associated with the token are limited to potential technical features within the relevant platform environment. These functionalities do not represent contractual entitlements and may depend on future development decisions, technical design choices, and operational conditions. The crypto-asset does not embody intrinsic economic value; instead, its value, if any, is determined exclusively by market dynamics such as supply, demand, and liquidity in secondary markets.

No such services are currently provided by the issuer.

The crypto-asset does not grant any legally enforceable or contractual rights or obligations to its holders or purchasers. Any functionalities accessible through the underlying technology are of a purely technical or operational nature and do not constitute rights comparable to ownership, profit participation, governance, or similar entitlements known from traditional financial instruments. Accordingly, holders do not acquire any legally enforceable claim against the issuer of the crypto-asset or any third party.

As the crypto-asset does not confer any legally enforceable rights or obligations, there are no applicable procedures or conditions for their exercise. Any interaction or functionality that may be available within the project’s technical infrastructure – such as participation mechanisms or protocol-level features – serves operational purposes only and does not create, evidence, or constitute any contractual or statutory entitlement.

As the crypto-asset does not confer any legally enforceable rights or obligations, there are no conditions or mechanisms for modifying such rights or obligations. Adjustments to the technical protocol, smart contract logic, or related systems may occur in the ordinary course of development or maintenance. Such changes do not alter the legal position of holders, as no contractual rights exist and no rights arise under applicable law or regulation. Holders should not interpret technical updates or governance-related changes as amendments to legally binding entitlements.

Information on future offers to the public of crypto-assets was not available at the time of writing this white paper (2026-02-23).

The crypto-assets themselves are not subject to any technical or contractual transfer restrictions and are generally freely transferable. However, crypto-asset service providers may impose restrictions on buyers or sellers in accordance with applicable laws, internal policies or contractual terms agreed with their clients.

The supply of the crypto-asset in scope is not capped. New PEP are generated on an ongoing basis through the block reward mechanism of the Pepecoin network. In this context, 10,000 PEP are created per block, with blocks being produced approximately every minute. As a result, the total supply of the crypto-asset increases continuously and may continue to increase indefinitely. Investors should note that changes in the supply of the crypto-asset can have a negative impact.

Not applicable, as the crypto-asset in scope does not have any value protection scheme in place.

Not applicable, as the crypto-asset in scope does not have any compensation scheme in place.

Applicable law likely depends on the location of any particular transaction with the token.

Competent court likely depends on the location of any particular transaction with the token.

The crypto-asset in scope is implemented on the Pepecoin blockchain following the standards described below.

The crypto-asset in scope is implemented on the Pepecoin blockchain following the standards described below.

The crypto-asset operates on a well-defined set of protocols and technical standards that are intended to ensure its security, decentralisation, and functionality. Below are some of the key ones:

1. Network protocols

- The crypto-asset follows a decentralised, peer-to-peer (P2P) protocol where nodes communicate across the Pepecoin network to propagate transactions and blocks.

- Pepecoin uses Proof-of-Work (PoW) as its consensus mechanism.

- The underlying hashing algorithm for mining is Scrypt.

- Since 2024, Pepecoin has supported Auxiliary Proof-of-Work (AuxPoW), also known as merged mining, which allows compatible Scrypt miners to secure Pepecoin while simultaneously mining other supported networks, most notably Litecoin.

2. Transaction and interface standards

- Pepecoin supports standard on-chain transactions recorded on its blockchain.

- The network provides a JSON-RPC interface that may be used for wallet software, third-party integrations, and command-line interaction.

- Pepecoin also supports basic script-based transaction functionality, including multi-signature arrangements and raw transaction creation and signing.

3. Blockchain data structure and block standards

- The Pepecoin blockchain consists of sequentially linked blocks, where each block header contains the hash of the previous block.

- Blocks are produced approximately every one minute.

- The protocol applies Digishield difficulty adjustment to recalibrate mining difficulty on a per-block basis.

- Blocks have a maximum size of approximately 1 MB, and transactions are referenced through unique transaction identifiers.

4. Upgrade and development standards

- The Pepecoin network is maintained through the Pepecoin Core reference implementation.

- Protocol rules are defined primarily through the Pepecoin Core software and its development and maintenance process.

The crypto-asset in scope is implemented on the Pepecoin blockchain following the standards described below.

1. Decentralised ledger: The Pepecoin blockchain acts as a decentralised ledger for all transactions, with the intention of preserving an unalterable record of transfers and ownership to ensure transparency and security.

2. Private key management: To safeguard their crypto-assets, users must securely store their wallet’s private keys and recovery credentials.

3. Cryptographic integrity: Pepecoin employs cryptographic mechanisms to validate and secure transactions and blocks. The network uses the Scrypt algorithm in connection with its Proof-of-Work mechanism, while transaction signing and wallet control rely on public-key cryptography. In addition, the blockchain structure links blocks through cryptographic hashes, which is intended to preserve the integrity of the ledger over time.

The crypto-asset in scope is implemented on the Pepecoin blockchain following the standards described below.

The crypto-asset’s consensus mechanism is Proof-of-Work (PoW), which is intended to provide security and decentralisation. In this system, miners gather pending transactions and assemble them into candidate blocks. They then repeatedly vary a nonce value and hash the block data using the Scrypt algorithm until a result is found that satisfies the network’s current difficulty target. In computational terms, it is difficult to find such a valid result, but easy for other network participants to verify it.

Once a miner finds a valid block, it is broadcast to the network and verified by full nodes against the protocol’s predetermined consensus rules. If valid, the block is added to the blockchain and becomes part of the canonical transaction history. Pepecoin also supports Auxiliary Proof-of-Work (AuxPoW), which allows merged mining with other Scrypt-based networks, thereby enabling miners to contribute security to Pepecoin while performing the same work for another compatible blockchain.

The protocol uses Digishield to adjust mining difficulty on a per-block basis, with the intention of maintaining an average block interval of approximately one minute. Pepecoin follows a longest-valid-chain approach typical of Proof-of-Work networks, meaning that the chain with the greatest accumulated valid work is generally treated by nodes as the authoritative version of the ledger. As with other PoW-based systems, transaction finality is probabilistic, meaning that the degree of certainty increases as additional blocks are added after the block containing the relevant transaction.

The crypto-asset in scope is implemented on the Pepecoin blockchain following the standards described below.

The crypto-asset’s incentive mechanism is designed to encourage miners to secure the network and validate transactions. Miners are rewarded with block rewards consisting of newly minted Pepecoin and with transaction fees paid by users whose transactions are included in a block.

Pepecoin currently provides a fixed block reward of 10,000 PEP for each valid block added to the blockchain. In addition, miners receive the transaction fees associated with the transactions included in that block. These fees are paid by network users and may vary depending on transaction characteristics and network conditions. The combination of block rewards and transaction fees is intended to create an economic incentive for continued miner participation and network security.

Pepecoin does not rely on staking, delegation, or protocol-level slashing mechanisms. Instead, its economic security model is based on the cost of mining activity, including hardware and electricity expenditure. Where miners participate through mining pools, the distribution of rewards among pool participants is determined by the rules of the relevant pool and takes place outside the core protocol. Regular full node operators do not generally receive direct protocol-level compensation for maintaining and validating the network.

Not applicable, as the DLT is not operated by the issuer, the offeror, the person seeking admission to trading, or any third-party acting on their behalf.

1. Regulatory and Compliance

Regulatory frameworks applicable to crypto-asset services in the European Union and in third countries are evolving. Supervisory authorities may introduce, interpret, or enforce rules that affect (i) the eligibility of this crypto-asset for admission to trading, (ii) the conditions under which a crypto-asset service provider may offer trading, custody, or transfer services for it, or (iii) the persons or jurisdictions to which such services may be provided. As a result, the crypto-asset service provider admitting this crypto-asset to trading may be required to suspend, restrict, or terminate trading or withdrawals for regulatory reasons, even if the crypto-asset itself continues to function on its underlying network.

2. Trading venue and connection risk

Trading in the crypto-asset depends on the uninterrupted operation of the trading venues on which it is listed and, where applicable, on its technical connections to external liquidity sources or venues. Interruptions such as system downtime, maintenance, faulty integrations, API changes, or failures at an external venue can temporarily prevent order placement, execution, deposits, or withdrawals, even when the underlying blockchain is functioning. In addition, trading platforms in emerging markets may operate under differing governance, compliance, and oversight standards, which can increase the risk of operational failures or disorderly market conditions.

3. Market formation and liquidity conditions

The price and tradability of the crypto-asset depend on actual trading activity on the venues to which the service provider is connected, whether centralised exchanges (CEXs) or decentralised exchanges (DEXs). Trading volumes may at times be low, order books thin, or liquidity concentrated on a single venue. In such conditions, buy or sell orders may not be executed in full or may be executed only at a less favourable price, resulting in slippage.

Volatility: The market price of the crypto-asset may fluctuate significantly over short periods, including for reasons that are not linked to changes in the underlying project or protocol. Periods of limited liquidity, shifts in overall market sentiment, or trading on only a small number of CEXs or DEXs can amplify these movements and lead to higher slippage when orders are executed. As a result, investors may be unable to sell the crypto-asset at or close to a previously observed price, even where no negative project-specific event has occurred.

4. Counterparty and service provider dependence

The admission of the crypto-asset to trading may rely on several external parties, such as connected centralised or decentralised trading venues, liquidity providers, brokers, custodians, or technical integrators. If any of these counterparties fail to perform, suspend their services, or apply internal restrictions, the trading, deposit, or withdrawal of the crypto-asset on the listing crypto-asset service provider can be interrupted or halted.

Quality of counterparties: Trading venues and service providers in certain jurisdictions may operate under regulatory or supervisory standards that are lower or differently enforced than those applicable in the European Union. In such environments, deficiencies in governance, risk management, or compliance may remain undetected, which increases the probability of abrupt service interruptions, investigations, or forced wind-downs.

Delisting and service suspension: The crypto-asset’s availability may depend on the internal listing decisions of these counterparties. A delisting or suspension on a key connected venue can materially reduce liquidity or make trading temporarily impossible on the admitting service provider, even if the underlying crypto-asset continues to function.

Insolvency of counterparties: If a counterparty involved in holding, routing, or settling the crypto-asset becomes insolvent, enters restructuring, or is otherwise subject to resolution measures, assets held or processed by that counterparty may be frozen, become temporarily unavailable, or be recoverable only in part or not at all, which can result in losses for clients whose positions were maintained through that counterparty. This risk applies in particular where client assets are held on an omnibus basis or where segregation is not fully recognised in the counterparty’s jurisdiction.

5. Operational and information risks

Due to the irrevocability of blockchain transactions, incorrect transaction approvals or the use of wrong networks or addresses will typically make the transferred funds irrecoverable. Because trading may also rely on technical connections to other venues or service providers, downtime or faulty code in these connections can temporarily block trading, deposits, or withdrawals even when the underlying blockchain is functioning. In addition, different groups of market participants may have unequal access to technical, governance, or project-related information, which can lead to information asymmetry and place less informed investors at a disadvantage when making trading decisions.

6. Market access and liquidity concentration risk

If the crypto-asset is only available on a limited number of trading platforms or through a single market-making entity, this may result in reduced liquidity, greater price volatility, or periods of inaccessibility for retail holders.

1. Insolvency of the issuer

As with any commercial entity, the issuer may face insolvency risks. These may result from insufficient funding, low market interest, mismanagement, or external shocks (e.g. pandemics, armed conflicts). In such a case, ongoing development, support, and governance of the project may cease, potentially affecting the viability and tradability of the crypto-asset.

2. Legal and regulatory risks

The issuer operates in a dynamic and evolving regulatory environment. Failure to comply with applicable laws or regulations in relevant jurisdictions may result in enforcement actions, penalties, or restrictions on the project’s operations. These may negatively impact the crypto-asset’s availability, market acceptance, or legal status.

3. Operational risks

The issuer may fail to implement adequate internal controls, risk management, or governance processes. This can result in operational disruptions, financial losses, delays in updating the white paper, or reputational damage.

4. Governance and decision-making

The issuer’s management body is responsible for key strategic, operational, and disclosure decisions. Ineffective governance, delays in decision-making, or lack of resources may compromise the stability of the project and its compliance with MiCA requirements. High concentration of decision-making authority or changes in ownership/control can amplify these risks.

5. Reputational risks

The issuer’s reputation may be harmed by internal failures, external accusations, or association with illicit activity. Negative publicity can reduce trust in the issuer and impact the perceived legitimacy or value of the crypto-asset.

6. Counterparty dependence

The issuer may depend on third-party providers for certain core functions, such as technology development, marketing, legal advice, or infrastructure. If these partners discontinue their services, change ownership, or underperform, the issuer’s ability to operate the project or maintain investor communication may be impaired. This could disrupt project continuity or undermine market confidence, ultimately affecting the crypto-asset’s value.

1. Valuation risk

The crypto-asset does not represent a claim, nor is it backed by physical assets or legal entitlements. Its market value is driven solely by supply and demand dynamics and may fluctuate significantly. In the absence of fundamental value anchors, such assets can lose their entire market value within a very short time. Historical market behaviour has shown that some types of crypto-assets have become worthless. Investors should be aware that this crypto-asset may lose all of its value.

2. Market volatility risk

Crypto-asset prices can fluctuate sharply due to changes in market sentiment, macroeconomic conditions, regulatory developments, or technology trends. Such volatility may result in rapid and significant losses. Holders should be prepared for the possibility of losing the full amount invested.

3. Liquidity and price-determination risk

Low trading volumes, fragmented trading across venues, or the absence of active market makers can restrict the ability to buy or sell the crypto-asset. In such situations, it is not guaranteed that an observable market price will exist at all times. Spreads may widen materially, and orders may only be executable under unfavourable conditions, which can make liquidation costly or temporarily impossible.

4. Crypto-asset security risk

Loss or theft of private keys, unauthorised access to wallets, or failures of custodial or exchange service providers can result in the irreversible loss of assets. Because blockchain transactions are final, recovery of funds after a compromise is generally impossible.

5. Fraud and scam risk

The pseudonymous and irreversible nature of blockchain transactions can attract fraudulent schemes. Typical forms include fake or unauthorised crypto-assets imitating established ones, phishing attempts, deceptive airdrops, or social-engineering attacks. Investors should exercise caution and verify the authenticity of counterparties and information sources.

6. Legal and regulatory reclassification risk

Legislative or regulatory changes in the European Union or in the Member State where the crypto-asset is admitted to trading may alter its legal classification, permitted uses, or tradability. In third countries, the crypto-asset may be treated as a financial instrument or security, which can restrict its offering, trading, or custody.

7. Absence of investor protection

The crypto-asset is not covered by investor-compensation or deposit-guarantee schemes. In the event of loss, fraud, or insolvency of a service provider, holders may have no access to recourse mechanisms typically available in regulated financial markets.

8. Counterparty risk

Reliance on third-party exchanges, custodians, or intermediaries exposes holders to operational failures, insolvency, or fraud of these parties. Investors should conduct due diligence on service providers, as their failure may lead to the partial or total loss of held assets.

9. Reputational risk

Negative publicity related to security incidents, misuse of blockchain technology, or associations with illicit activity can damage public confidence and reduce the crypto-asset’s market value.

10. Community and sentiment risk

Because the crypto-asset’s perceived relevance and expected future use depend largely on community engagement and the prevailing sentiment, a loss of public interest, negative coverage or reduced activity of key contributors can materially reduce market demand.

11. Macroeconomic and interest-rate risk

Fluctuations in interest rates, exchange rates, general market conditions, or overall market volatility can influence investor sentiment towards digital assets and affect the crypto-asset’s market value.

12. Taxation risk

Tax treatment varies across jurisdictions. Holders are individually responsible for complying with all applicable tax laws, including the reporting and payment of taxes arising from the acquisition, holding, or disposal of the crypto-asset.

13. Anti-money-laundering and counter-terrorist financing risk

Wallet addresses or transactions connected to the crypto-asset may be linked to sanctioned or illicit activity. Regulatory responses to such findings may include transfer restrictions, reporting obligations, or the freezing of assets on certain venues.

14. Market-abuse risk

Due to limited oversight and transparency, crypto-assets may be vulnerable to market-abuse practices such as spoofing, pump-and-dump schemes, or insider trading. Such activities can distort prices and expose holders to sudden losses.

15. Legal ownership and jurisdictional risk

Depending on the applicable law, holders of the crypto-asset may not have enforceable ownership rights or effective legal remedies in cases of disputes, fraud, or service failure. In certain jurisdictions, access to exchanges or interfaces may be restricted by regulatory measures, even if on-chain transfer remains technically possible.

16. Concentration risk

A large proportion of the total supply may be held by a small number of holders. This can enable market manipulation, governance dominance, or sudden large-scale liquidations that adversely affect market stability, price levels, and investor confidence.

As this white paper relates to admission to trading of the crypto-asset, the risk description below reflects general implementation risks typically associated with crypto-asset projects and relevant for the crypto-asset service provider. The party admitting the crypto-asset to trading is not involved in the project’s implementation and does not assume responsibility for its governance, funding, or execution.

Delays, failures, or changes in the implementation of the project as outlined in its public roadmap or technical documentation may negatively impact the perceived credibility or usability of the crypto-asset. This includes risks related to project governance, resource allocation, technical delivery, and team continuity.

Key-person risk: The project may rely on a limited number of individuals for development, maintenance, or strategic direction. The departure, incapacity, or misalignment of these individuals may delay or derail the implementation.

Timeline and milestone risk: Project milestones may not be met as announced. Delays in feature releases, protocol upgrades, or external integrations can undermine market confidence and affect the adoption, use, or value of the crypto-asset.

Delivery risk: Even if implemented on time, certain functionalities or integrations may not perform as intended or may be scaled back during execution, limiting the crypto-asset’s practical utility.

As this white paper relates to admission to trading of the crypto-asset, the following risks concern the underlying distributed ledger technology (DLT), its supporting infrastructure, and related technical dependencies. Failures or vulnerabilities in these systems may affect the availability, integrity, or transferability of the crypto-asset.

1. Blockchain dependency risk

The functionality of the crypto-asset depends on the continuous and stable operation of the blockchain(s) on which it is issued. Network congestion, outages, or protocol errors may temporarily or permanently disrupt on-chain transactions. Extended downtime or degradation in network performance can affect trading, settlement, or the usability of the crypto-asset.

2. Smart contract vulnerability risk

The smart contract that defines the crypto-asset’s parameters or governs its transfers may contain coding errors or security vulnerabilities. Exploitation of such weaknesses can result in unintended token minting, permanent loss of funds, or disruption of token functionality. Even after external audits, undetected vulnerabilities may persist due to the immutable nature of deployed code.

3. Wallet and key-management risk

The custody of crypto-assets relies on secure private key management. Loss, theft, or compromise of private keys results in irreversible loss of access. Custodians, trading venues, or wallet providers may be targeted by cyberattacks. Compatibility issues between wallet software and changes to the blockchain protocol (e.g. network upgrades) can further limit user access or the ability to transfer the crypto-asset.

Outdated or vulnerable wallet software:

Users relying on outdated, unaudited, or unsupported wallet software may face compatibility issues, security vulnerabilities, or failures when interacting with the blockchain. Failure to update wallet software in line with protocol developments can result in transaction errors, loss of access, or exposure to known exploits.

4. Network security risks

Attack risks: Blockchains may be subject to denial-of-service (DoS) attacks, 51% attacks, or other exploits targeting the consensus mechanism. These can delay transactions, compromise finality, or disrupt the accurate recording of transfers.

Centralisation concerns: Despite claims of decentralisation, a relatively small number of validators or a high concentration of stake may increase the risk of collusion, censorship, or coordinated network downtime, which can affect the resilience and operational reliability of the crypto-asset.

5. Bridge and interoperability risk

Where tokens can be bridged or wrapped across multiple blockchains, vulnerabilities in bridge protocols, validator sets, or locking mechanisms may result in loss, duplication, or misrepresentation of assets. Exploits or technical failures in these systems can instantly impact circulating supply, ownership claims, or token fungibility across chains.

6. Forking and protocol-upgrade risk

Network upgrades or disagreements among node operators or validators can result in blockchain “forks”, where the blockchain splits into two or more incompatible versions that continue separately from a shared past. This may lead to duplicate token representations or incompatibilities between exchanges and wallets. Until consensus stabilises, trading or transfers may be disrupted or misaligned. Such situations may be difficult for retail holders to navigate, particularly when trading platforms or wallets display inconsistent token information.

7. Economic-layer and abstraction risk

Mechanisms such as gas relayers, wrapped tokens, or synthetic representations may alter the transaction economics of the underlying token. Changes in transaction costs, token demand, or utility may reduce its usage and weaken both its economic function and perceived value within its ecosystem.

8. Spam and network-efficiency risk

High volumes of low-value (“dust”) or automated transactions may congest the network, slow validation times, inflate ledger size, and raise transaction costs. This can impair performance, reduce throughput, and expose address patterns to analysis, thereby reducing network efficiency and privacy.

9. Front-end and access-interface risk

If users rely on centralised web interfaces or hosted wallets to interact with the blockchain, service outages, malicious compromises, or domain expiries affecting these interfaces may block access to the crypto-asset, even while the blockchain itself remains fully functional. Dependence on single web portals introduces a critical point of failure outside the DLT layer.

10. Decentralisation claim risk

While the technical infrastructure may appear distributed, the actual governance or economic control of the project may lie with a small set of actors. This disconnect between marketing claims and structural reality can lead to regulatory scrutiny, reputational damage, or legal uncertainty – especially if the project is presented as ‘community-governed’ without substantiation.

None.

The crypto-asset in scope is implemented on the Pepecoin blockchain following the standards described below.

The crypto-asset’s consensus mechanism is Proof-of-Work (PoW), which is intended to provide security and decentralisation. In this system, miners gather pending transactions and assemble them into candidate blocks. They then repeatedly vary a nonce value and hash the block data using the Scrypt algorithm until a result is found that satisfies the network’s current difficulty target. In computational terms, it is difficult to find such a valid result, but easy for other network participants to verify it.

Once a miner finds a valid block, it is broadcast to the network and verified by full nodes against the protocol’s predetermined consensus rules. If valid, the block is added to the blockchain and becomes part of the canonical transaction history. Pepecoin also supports Auxiliary Proof-of-Work (AuxPoW), which allows merged mining with other Scrypt-based networks, thereby enabling miners to contribute security to Pepecoin while performing the same work for another compatible blockchain.

The protocol uses Digishield to adjust mining difficulty on a per-block basis, with the intention of maintaining an average block interval of approximately one minute. Pepecoin follows a longest-valid-chain approach typical of Proof-of-Work networks, meaning that the chain with the greatest accumulated valid work is generally treated by nodes as the authoritative version of the ledger. As with other PoW-based systems, transaction finality is probabilistic, meaning that the degree of certainty increases as additional blocks are added after the block containing the relevant transaction.

The crypto-asset in scope is implemented on the Pepecoin blockchain following the standards described below.

The crypto-asset’s incentive mechanism is designed to encourage miners to secure the network and validate transactions. Miners are rewarded with block rewards consisting of newly minted Pepecoin and with transaction fees paid by users whose transactions are included in a block.

Pepecoin currently provides a fixed block reward of 10,000 PEP for each valid block added to the blockchain. In addition, miners receive the transaction fees associated with the transactions included in that block. These fees are paid by network users and may vary depending on transaction characteristics and network conditions. The combination of block rewards and transaction fees is intended to create an economic incentive for continued miner participation and network security.

Pepecoin does not rely on staking, delegation, or protocol-level slashing mechanisms. Instead, its economic security model is based on the cost of mining activity, including hardware and electricity expenditure. Where miners participate through mining pools, the distribution of rewards among pool participants is determined by the rules of the relevant pool and takes place outside the core protocol. Regular full node operators do not generally receive direct protocol-level compensation for maintaining and validating the network.

The energy consumption of this asset is aggregated across multiple components:

For the calculation of energy consumptions, the so called 'bottom-up' approach is being used. The nodes are considered to be the central factor for the energy consumption of the network. These assumptions are made on the basis of empirical findings through the use of public information sites, open-source crawlers and crawlers developed in-house. The main determinants for estimating the hardware used within the network are the requirements for operating the client software. The energy consumption of the hardware devices was measured in certified test laboratories. When calculating the energy consumption, we used - if available - the Functionally Fungible Group Digital Token Identifier (FFG DTI) to determine all implementations of the asset in question in scope and we update the mappings regularly, based on data of the Digital Token Identifier Foundation. The information regarding the hardware used and the number of participants in the network is based on assumptions that are verified with best effort using empirical data. In general, participants are assumed to be largely economically rational. As a precautionary principle, we make assumptions on the conservative side when in doubt, i.e. making higher estimates for the adverse impacts. Effects of merge mining are taken into account.

The energy consumption associated with this crypto-asset is aggregated of multiple contributing components, primarily the underlying blockchain network and the execution of token-specific operations. To determine the energy consumption of a token, the energy consumption of the underlying blockchain network Pepecoin, is calculated first. A proportionate share of that energy use is then attributed to the token based on its activity level within the network (e.g. transaction volume, contract execution).

The Functionally Fungible Group Digital Token Identifier (FFG DTI) is used to determine all technically equivalent implementations of the crypto-asset in scope.

Estimates regarding hardware types, node distribution, and the number of network participants are based on informed assumptions, supported by best-effort verification against available empirical data. Unless robust evidence suggests otherwise, participants are assumed to act in an economically rational manner. In line with the precautionary principle, conservative estimates are applied where uncertainty exists – that is, estimates tend towards the higher end of potential environmental impact.

To determine the proportion of renewable energy usage, the locations of the nodes are to be determined using public information sites, open-source crawlers and crawlers developed in-house. If no information is available on the geographic distribution of the nodes, reference networks are used which are comparable in terms of their incentivization structure and consensus mechanism. This geo-information is merged with public information from Our World in Data, see citation. The intensity is calculated as the marginal energy cost wrt. one more transaction. Ember (2025); Energy Institute - Statistical Review of World Energy (2024) - with major processing by Our World in Data. “Share of electricity generated by renewables - Ember and Energy Institute” [dataset]. Ember, “Yearly Electricity Data Europe”; Ember, “Yearly Electricity Data”; Energy Institute, “Statistical Review of World Energy” [original data]. Retrieved from https://ourworldindata.org/grapher/share-electricity-renewables.

To determine the GHG Emissions, the locations of the nodes are to be determined using public information sites, open-source crawlers and crawlers developed in-house. If no information is available on the geographic distribution of the nodes, reference networks are used which are comparable in terms of their incentivization structure and consensus mechanism. This geo-information is merged with public information from Our World in Data, see citation. The intensity is calculated as the marginal emission wrt. one more transaction. Ember (2025); Energy Institute - Statistical Review of World Energy (2024) - with major processing by Our World in Data. “Carbon intensity of electricity generation - Ember and Energy Institute” [dataset]. Ember, “Yearly Electricity Data Europe”; Ember, “Yearly Electricity Data”; Energy Institute, “Statistical Review of World Energy” [original data]. Retrieved from https://ourworldindata.org/grapher/carbon-intensity-electricity Licenced under CC BY 4.0.