Pudgy Penguins Faces Price Drop and Regulatory Delays Amid Controversial Post Removal

• Pudgy Penguins removed a controversial post that was criticized for xenophobic stereotypes after being reported by partner Manchester City according to reports.
• The project's token (PENGU) dropped 11.42% on 2026-01-19, trading below key moving averages and confirming ongoing selling pressure according to data.
• The U.S. SEC postponed its decision on the Pudgy Penguins ETF until March 11, 2026, due to concerns over custody and valuation according to reports.

Pudgy Penguins removed a tweet that suggested the social media crackdown by X on bot spam could have a "significant effect on India's economy." The post drew criticism for relying on harmful stereotypes and was flagged by a user named Satvik, who reported it to Manchester City. Pudgy Penguins acknowledged the post was inappropriate and has since deleted it from its channels according to reports.

Following the incident, Pudgy Penguins plans to apologize to the user who flagged the content and has not yet issued a public statement on the issue. The response to the controversy highlights ongoing challenges in aligning the brand's image with its sometimes controversial social media presence according to reports.

Meanwhile, the price of PENGU has dropped 11.42% on 2026-01-19, continuing a downtrend with the token trading below its 20, 50, and 200-day moving averages. Institutional investors like Digital Finance Group, however, continue to accumulate PENGU, indicating some confidence in the project's long-term potential according to reports.

New partnerships announced by Pudgy Penguins with Manchester City Football Club and MapleStory N aim to expand the utility of NFTs beyond the crypto space. These partnerships include integrating NFTs into gaming and physical merchandise. The move underscores the project's broader ambitions and its effort to reach new audiences according to reports.

What is the impact of the controversial post on Pudgy Penguins' brand and operations?

The incident underscores a misalignment between Pudgy Penguins' branding and its public messaging. The project's child-friendly image and family-oriented NFTs contrast with the often polarizing and financially focused tone of its social media posts according to reports. This has led to criticism from both users and industry observers. Some argue that the incident could damage the brand's reputation and affect its ability to attract mainstream audiences, especially in markets like India where social media engagement is critical.

The response from Pudgy Penguins has been cautious, with no public apology issued at the time of writing. While the company has removed the post and acknowledged its inappropriateness, there has been no broader policy changes or public statements from CEO Lucas Netz. Analysts are watching to see how the project will address similar incidents in the future according to reports.

How are regulatory delays and technical indicators affecting PENGU investors?

The U.S. SEC's decision on the proposed Pudgy Penguins ETF has been delayed until March 11, 2026. This delay has raised concerns among investors about custody, valuation, and market risk issues. The postponement adds to the uncertainty surrounding the project and may affect broader adoption in institutional markets according to reports.

Technical indicators show PENGU remains in a downtrend, with the price well below its 20, 50, and 200-day moving averages. Analysts at Traders Union have noted that the price action indicates ongoing selling pressure and limited upside potential in the short term. However, some analysts remain optimistic about long-term growth, citing institutional interest and expanding NFT utility as positive factors according to reports.

What are the implications of new partnerships for Pudgy Penguins?

Partnerships with Manchester City Football Club and MapleStory N represent a significant shift in Pudgy Penguins' strategy. The integration of NFTs into gaming and physical merchandise aims to broaden the appeal of the project beyond traditional crypto-native audiences. These collaborations could provide new revenue streams and enhance the utility of Pudgy Penguins NFTs according to reports.

Despite these developments, experts are cautious. Some argue that the recent partnerships have not had a clear impact on the price of PENGU, suggesting that regulatory clarity and stronger market sentiment may be needed for the token to regain momentum. Institutional accumulation remains a positive sign, but it remains to be seen whether these partnerships will be sufficient to overcome current challenges according to reports.