BNB Chain has initiated legal action against a former employee who allegedly used a retained seed phrase from an official tutorial video to launch an unauthorized memecoin named ASTEROID. The token briefly reached a $10 million market cap, with on-chain data suggesting the creator secured $628,000 in profit. BNB Chain has completely disavowed the token, emphasizing that seed phrases cannot be revoked like traditional credentials and highlighting ongoing insider threat risks within the ecosystem.
Unauthorized memecoin issuance
- ▪The market value of the ASTEROID token briefly rose to $10 million within the first four hours of its launch on August 1, 2026.
- ▪A former BNB Chain employee used a wallet address and seed phrase, originally generated for a video tutorial, to launch an unauthorized memecoin.
- ▪The unauthorized memecoin launched by the former BNB Chain employee is named ASTEROID, also known as Asteroid Shiba.
Former employee wallet breach
- ▪The former BNB Chain employee retained unauthorized access to a tutorial wallet's seed phrase after leaving the company and generated a new private key to access the address.
- ▪The breached wallet address was previously used in February 2025 to create a demonstration token called TST, which reached a market capitalization above $50 million.
- ▪Four newly created wallets spent approximately $10,000 to acquire 796.7 million ASTEROID tokens, representing 79.67% of the total supply, and later sold 718.8 million tokens for 1,103 BNB, worth around $638,000.
Legal action against insider
- ▪Binance co-founder Changpeng Zhao publicly characterized the former employee as a scammer and warned users to remain cautious.
- ▪BNB Chain announced on August 1, 2026, that it is pursuing legal action against the former employee and is cooperating with relevant law enforcement authorities.
Crypto insider threat risks
- ▪In March 2025, a Binance Wallet team member was suspended for front-running a token generation event using insider information acquired from a prior BNB Chain role.
- ▪In December 2025, a Binance employee was suspended after promoting a self-made meme coin called Year of the Yellow Fruit from the official Binance Futures X account.
- ▪The ASTEROID incident represents the third insider-linked token controversy in the Binance ecosystem since early 2025.
Token verification protocols
- ▪BNB Chain explicitly denied creating, approving, promoting, or supporting the ASTEROID token and stated it has no control over the token or the associated wallet.
- ▪BNB Chain advised users to verify contract addresses through official channels rather than relying on the transaction history or reputation of a deploying wallet.
Internal security measures
- ▪Security experts suggest that blockchain organizations should use dummy phrases or automated scripts that wipe keys immediately after recording educational content.
- ▪The ASTEROID incident highlights a wallet offboarding gap where traditional credential revocation cannot disable a memorized or copied seed phrase.
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