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BTC 
ETH Robinhood co-founder mnemonic leaked, hackers manipulated Memecoin triggered market follow-up
The unexpected leak of a Robinhood co-founder's mnemonic allowed hackers to quickly persuade thousands of traders to follow suit and buy the same Memecoin, which once again proved that the herd effect can quickly change the cryptocurrency market. The incident did not affect Bitcoin or Ethereum, but it exposed a weakness of the entire cryptocurrency market: Traders on any platform will blindly follow large wallets, and once the wallet is breached, this behavior may be used as a weapon.
In about two hours, the market value of the token named "$1" soared from US$500,000 to US$14 million, and then there was a correction, with cumulative transaction volume exceeding US$20 million. Michael, chief commercial officer of TokenPocket Wallet, posted a series of posts on the X platform summarizing what happened that night. According to the same source cited by the Encrypted Data Platform, this was an organized incident of increasing shipments.
How a wallet can shake the market
Michael said that this was not a hacking attack, but a leak caused by mistakes. He claimed that mnemonic words for the self-managed wallet to which the co-founder belongs-a sequence of words used to access the wallet-were accidentally shared during a live broadcast on Wednesday. That means anyone who watches the live broadcast and manages to jot down the words will have access to a wallet with approximately $1.5 million in assets.
The hacker was the first person to enter the address. After taking control of the address, the attacker started buying "$1" tokens. Bystanders monitoring the wallet interpreted the purchase as an investment operation by Robinhood's founder, so they quickly followed up on the purchase, causing the market value of the token to rise nearly 28 times before the purchase ended, and then the price began to fall. As a result, investors who bought later suffered losses.
Why the freeze is too late for traders
Michael said Robinhood's remote procedure call service, software used to relay transactions to the network, blocks hacked addresses. Nodes using the RPC service stop processing transactions sent from the wallet, effectively preventing hacking events from depleting assets in the wallet.
However, this control is not helpful to those who buy "$1" cryptocurrency near the peak. However, freezing wallets means that no transactions can be made in the future, but transactions previously completed on decentralized platforms will still be valid. During the lockdown, criminals moved to other platforms. According to Michael, they have moved to the BNB chain, created a new cryptocurrency, and conducted a wash transaction-that is, buying and selling the same token to create the illusion of demand-to drive up transaction volume and cash out.
Triggering effect of Memecoin
Compared with the entire market, the direct loss from this incident is small. On July 13, the price of Bitcoin was about US$62,800 and Ethereum was about US$1,778. Both fell slightly on the day, but were not affected by this Memecoin. The incident is worth exploring not just because of a token, but because the operating mechanism behind it is equally applicable on a larger scale.
Wash transactions and pull up shipments are the most common types of manipulation on the chain. According to data studied by the company in 2025, the cumulative transaction volume of suspected wash transactions on multiple blockchains is as high as approximately US$2.57 billion. This data is obtained by matching transactions rather than proving transaction intent. The market for "$1" tokens fits this pattern: creating signals and relying people believe the legitimacy of the wallet without verification, and then withdrawing through different chains.
The lesson about self-hosting actually comes from Robinhood itself. In its guide to using mnemonic words, it states that a set of words is the only way to restore unmanaged digital wallets and warns users not to share the words because sharing allows others to access funds in their accounts. Live broadcasting is one of the easiest ways to leak sensitive information.
