The Alpha:

• Coinbase is facing backlash for labeling Pepe the Frog, the mascot of the $PEPE memecoin, as a hate symbol associated with the alt-right.
• A newsletter sent out via email to Coinbase customers sparked outrage within the $PEPE community, leading to calls for Web3 to boycott the exchange and “#DeleteCoinbase” to start trending on Twitter.
• Some users are now migrating their $PEPE holdings to Gemini as the price of the popular memecoin continues to fall.

Dive deeper:

Coinbase ignited controversy this week by labeling Pepe the Frog, the mascot of the $PEPE memecoin, as a hate symbol associated with the alt-right. In a newsletter sent out to Coinbase subscribers on May 10, the company acknowledged the recent surge in popularity of $PEPE but pointed to Pepe’s controversial history in a now-deleted section.

The email’s characterization of the frog meme referenced the 2016 designation of Pepe as a hate symbol by the Anti-Defamation League (ADL) due to its adoption by alt-right groups. Yet, members of the $PEPE community feel this to be a somewhat tone-deaf misrepresentation of Pepe, considering the character’s long history within the crypto and NFT space.

Although in the past, Pepe may have been associated with and co-opted by right-wing hate groups, the frog’s creator, Matt Furie, has sought to distance the character from any sinister connotations. To do so, Furie even formed the #SavePepe campaign in collaboration with the ADL in an effort to reclaim the symbol. Furthermore, $PEPE community members noted that Coinbase’s characterization of Pepe seems to ignore the fact that Furie has been leveraging his Pepe IP on the blockchain as a prominent part of the NFT space for years.

Now, calls for a boycott of Coinbase have emerged, with the hashtag “#DeleteCoinbase” trending on Twitter.

What’s next

As illustrated by Kenobi’s above tweet, the controversy surrounding Coinbase’s labeling of Pepe the Frog as a hate symbol has led many avid $PEPE traders to distance themselves from the popular exchange in favor of its competitor, Gemini. Although $PEPE was only listed on Gemini a day before the Coinbase email was sent out, by some reports, the exchange has already seen an influx of over two trillion $PEPE.

Seemingly though, the ongoing controversy isn’t only about whether Coinbase is in the wrong, but rather, about the responsibilities of exchanges and other prominent platforms in ethically navigating discourse surrounding cultural symbols. Because amid the conversation inspired by the initial email, Coinbase’s Chief Legal Officer, Paul Grewal, who previously emphasized the importance of public discourse to foster collaboration, issued an apology on behalf of his company’s decision.

While this debacle continues to unfold, #DeleteCoinbase has been underlined by the fact that, in the wake of Coinbase’s criticisms, the price of $PEPE has begun to decline. Although the popular token has continued to lead the “memecoin season” charge as numerous other adjacent currencies crop up, it has dropped by around 15 percent in the past 24 hours alone, according to CoinGecko.

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