TheBlock
BNB Chain said it is pursuing legal action against a former employee who retained unauthorized access to the seed phrase for a wallet originally created for a token-launch tutorial, and later used it to launch the memecoin ASTEROID.
On-chain investigator Lookonchain traced four wallets linked to the staffer that bought nearly 80% of ASTEROID's supply for about $10,000 before selling most of those tokens for roughly $638,000. The pattern is a textbook insider extraction: accumulate cheap via privileged access, then distribute into demand.
Founder Changpeng "CZ" Zhao publicly labeled the individual "basically a scammer." BNB Chain did not name the employee or specify jurisdiction for the legal action.
Why it matters
Tutorial wallets are a recurring soft spot. A seed phrase generated for instructional content carries the same on-chain authority as any production wallet, and as long as a former staffer retains the keys, that authority transfers with them. The incident turns an internal HR and key-management lapse into a public reputational problem for BNB Chain, and gives every memecoin sniper a new template to flag.
Market impact
The dollar amounts are small relative to BNB Chain's broader activity, but the optics matter more than the size. CZ's willingness to publicly call out a former colleague sets the tone for how the chain handles insider abuse going forward, and the "legal action" framing signals coordination with counsel rather than a quiet internal settlement.
Frequently asked questions
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What did the former BNB Chain employee allegedly do?
BNB Chain says the staffer retained unauthorized access to a seed phrase for a wallet created for a token-launch tutorial, then used that wallet to launch the memecoin ASTEROID.
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How much money did the ASTEROID wallets make?
Lookonchain traced four wallets linked to the staffer that bought about 80% of ASTEROID's supply for roughly $10,000 and sold most of it for around $638,000.
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What did CZ say about the incident?
Changpeng "CZ" Zhao publicly labeled the former employee "basically a scammer," signaling that BNB Chain views the conduct as fraudulent rather than a gray-area mistake.
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Has BNB Chain filed a lawsuit yet?
The chain said it is "pursuing legal action" but did not name the employee or disclose the jurisdiction, so the filing venue and formal charges are not yet public.
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Why is the ASTEROID case notable beyond its dollar size?
It shows how a tutorial wallet, if its seed phrase is not destroyed, becomes a permanent insider-access key. The pattern gives memecoin snipers a template to flag similar setups in the future.
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