BNB Chain said on Aug. 1 that it was pursuing legal action against a former employee who allegedly retained unauthorized access to a seed phrase and later used the associated wallet address with a new memecoin.
Summary
- BNB Chain says a former employee retained unauthorized seed phrase access after leaving the company.
- Four wallets allegedly bought 79.67% of ASTEROID’s supply for $10,000 before later selling most tokens.
- Lookonchain estimates 1,103 BNB in sales produced approximately $628,000 in profit for the alleged operator.
The network said it was cooperating with authorities but did not identify the individual, jurisdiction, agency or court.
The wallet was created for a company video tutorial showing how to generate a token, according to BNB Chain’s statement. The organization said the former employee later generated a new private key from the retained seed phrase. It denied creating, authorizing, promoting or participating in the new token.
BNB Chain distances itself from ASTEROID
BNB Chain described the address’s later use as independent activity and said the token was not affiliated with or endorsed by the ecosystem. Its announcement did not provide a complaint, case number, named regulator or details about where the planned legal action would be brought.
Changpeng “CZ” Zhao reposted the statement and called the former employee “basically a scammer,” while telling users to “Stay SAFU.” His description is an allegation, not a court finding. BNB Chain did not disclose whether it is seeking asset recovery, damages or criminal charges.
Four wallets allegedly controlled nearly 80% of supply
On-chain analytics account Lookonchain linked the launch to a token called Asteroid Shiba, or ASTEROID. It alleged that four newly created wallets spent about $10,000 to acquire 796.7 million tokens, equal to 79.67% of the stated one billion-token supply.
Lookonchain said the wallets later sold 718.8 million ASTEROID for 1,103 BNB, valued at about $638,000, producing an estimated $628,000 profit. It published the four addresses for review on BscScan. However, blockchain records show wallet activity, not the legal identity controlling it. The employee attribution therefore remains an allegation supported by BNB Chain’s statement and Lookonchain’s analysis.
A seed can generate the private keys used within a deterministic wallet. Removing one private key from a device does not invalidate a retained copy of the underlying seed, which can be used to derive wallet keys again. The case raises questions about how tutorial wallets and recovery phrases were handled when employees left.
BNB Chain has not disclosed when the employee departed, how long the seed remained accessible or when it discovered the retained access. It also has not said whether other tutorial wallets are under review.
Crypto.news reported in 2025 that Binance suspended an employee following an investigation into alleged token front-running involving knowledge from a previous BNB Chain role. The latest statement does not say whether the incidents involve the same person.
Separately, as crypto.news reported, investigators have used fresh wallet clusters and concentrated ownership to examine suspected memecoin manipulation. Such patterns can establish connections between addresses, but identity claims may still require exchange records or other off-chain evidence.
Legal action and wallet tracing come next
BNB Chain said it is working with relevant authorities, but its statement did not name an agency that had opened an investigation. A formal complaint or enforcement notice would clarify the legal claims, venue and requested remedies. Until then, the company statement and on-chain analysis remain the main public records.
The wallets and any destinations receiving the 1,103 BNB may provide a trail for investigators. Recovery would depend on whether funds reach identifiable exchange accounts or services able to respond to lawful requests. BNB Chain has not announced a freeze, recovery or repayment.
No token-price reaction is included because multiple assets use the ASTEROID name and BNB Chain did not publish a contract address. Using market data for another token could misstate the event. The next verified development would be a company update, regulator notice or public court filing.
