A leaked seed phrase allegedly associated with a Robinhood founder was exploited by hackers to take control of a cryptocurrency wallet address, triggering a rapid pump-and-dump scheme involving the meme coin $1, according to Michael, Chief Business Officer at Token Pocket.
As reported by ChainCatcher, the attackers used the compromised address—along with related wallets—to purchase large quantities of the $1 token. This activity spurred a wave of retail investor FOMO (fear of missing out), causing thousands to buy in within a short timeframe. The token’s market capitalization surged from approximately $500,000 to $14 million almost overnight.
Michael noted that the price of $1 subsequently crashed after the initial spike, while trading volume hit around $20 million in just two hours. Following detection of suspicious activity, the primary compromised address was frozen.
Undeterred, the hackers reportedly migrated their operations to the BNB Chain, deploying a new token using the same cluster of addresses. They then generated artificial trading volume through self-trading before ultimately selling off their holdings to cash out.
In response, Robinhood’s RPC infrastructure implemented a freeze on the affected address by instructing network nodes to reject any transactions originating from it. This measure effectively prevents the address from transferring funds or engaging in further trades.