What to know:
- BNB Chain is pursuing legal action over the alleged misuse of a tutorial wallet seed.
- Four wallets bought 79.67% of ASTEROID and reportedly made an estimated $628K profit.
- BNB Chain has not named the former employee, court, agency or exact legal jurisdiction.
BNB Chain is pursuing legal action against a former employee accused of unauthorized wallet access. The individual allegedly retained a tutorial wallet’s seed phrase and later used the address with a new memecoin. The network is cooperating with authorities.
The Aug. 1 statement said BNB Chain is cooperating with relevant authorities. However, it did not name the individual, agency, jurisdiction, or court. No complaint or case number was included.
BNB Chain Tutorial Wallet Links to ASTEROID Trades
The wallet had been created for a video showing how to generate a token. BNB Chain said the former employee later used the retained seed phrase to generate a new private key. It described the action as unauthorized.
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BNB Chain denied creating, approving, promoting, or participating in the new asset. It also said it had no control over the token or wallet address. The project was not affiliated with or endorsed by the network.
Changpeng “CZ” Zhao reposted BNB Chain’s statement. He described the former employee as “basically a scammer” and told users to “Stay SAFU.” The remarks were personal allegations, not a court finding.
On-chain analytics account Lookonchain identified the memecoin as Asteroid Shiba, or ASTEROID. It alleged that four newly created wallets spent about $10,000 on 796.7 million tokens. The purchase represented 79.67% of the stated one billion-token supply.
According to Lookonchain, the wallets went on to sell 718.8 million ASTEROID for 1,103 BNB. The BNB was worth approximately $638,000. According to the analytics account, the trades generated profits amounting to approximately $628,000.
The analytics account posted the four wallet addresses on BscScan. The addresses are used in the buying and selling of tokens. Nevertheless, information from the blockchain cannot prove that a specific individual controls the wallet.
This is because there is no evidence presented by BNB Chain proving the association between a specific individual and the wallet addresses. There is also no court ruling on the matter.
What Comes Next in the Wallet Case?
The seed phrase can be used to regenerate the private keys of a deterministic wallet. The removal of a private key on one of the devices will not affect the seed phrase in any way.
BNB Chain didn’t mention the time when the employee resigned or for how long the seed phrase was accessible. Moreover, it didn’t disclose the time of finding the subsequent activities.
No information regarding the review of other tutorial wallets was revealed in the statement. Legal action has already been initiated by BNB Chain and even the authorities have been involved in the process. However, no information was mentioned about any financial damage claim or recovery of assets.
The statement provided no details about an asset freeze, fund recovery, or repayment. It also did not disclose whether the cited wallets still held the 1,103 BNB.
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