Binance founder and former CEO Changpeng Zhao (CZ) inadvertently triggered a trading frenzy around a test token, TST. Interestingly, One lucky trader turned $35,000 into nearly $700,000, representing gains of almost 1,900%.

The news centers around Four.meme, which advertises as the first meme coin fair launch platform on Binance Smart Chain (BSC).

Binance’s CZ Claims Accidental Exposure

The incident stemmed from an educational video made by the BNB team demonstrating how to launch a meme token on the Four.meme platform. However, it resulted in an unexpected surge in the test token TST’s market capitalization.

Changpeng Zhao took to social media platform X (Twitter) to clarify how TST gained traction. He cited a now-deleted video tutorial posted on the Four.meme platform.

“In this video, we launched a token named TST as the example….,” CZ explained, citing a BNB Chain team member.

Following an accidental reveal by the BNB team, members of the Chinese crypto community identified the token and began actively trading and promoting it. CZ emphasized that neither he nor Binance exchange holds any of the tokens.

“This is NOT an endorsement from me for the token…no one on the team (or Binance) holds any of that token. This is NOT an official token by the BNB Chain team or anyone. It is a test token used just for that video tutorial,” he articulated.

Reportedly, a team member also deleted the private key for the tutorial wallet. However, this did little to stop speculators from jumping in, sending TST’s market cap to nearly $500,000 within hours.

Crypto analyst Ai shed light on an intriguing transaction. A trader, identified by the wallet address 0xeBB…74711c, purchased $35,000 worth of TST just minutes before CZ’s tweet. As the hype built up, the trader’s holdings skyrocketed to a floating profit of $657,000—a staggering 1,885% return. Ai speculated whether this was pure luck or if the trader had inside knowledge about the video leak.

“Lucky/smart money 0xeBB…74711c happened to open a position of 35,000 USD in tokens five minutes before CZ tweeted TST, andnow has a floating profit of 657,000 USD, with a return rate of 1885%! After CZ tweeted, he quickly added 2 BNB. He currently holds 28.82 million TST, making him the top 1 address. I am also impressed by his luck,” Ai remarked.

Adding to the speculation, crypto user 0xSun suggested that the address could be linked to a Binance Chain team member. This speculation fueled suspicions of potential insider trading.

Elliot’s Crypto, another industry veteran, pointed out that BNB community members saw an opportunity, piling in on the trade and fueling a meme-driven price surge.

“Let’s send it for the culture of BNB memes… I mean there could be huge opportunity on these levels. I had just a small bag at dip and still holding…it’s shared by BNB chain first on the video but community found the cat,” the user noted.

Meanwhile, CZ insists that the TST token was purely for demonstration purposes. Nevertheless, the incident reflects his and other industry leaders’ immense influence. Even an unintentional mention can send markets into a frenzy, reinforcing how unpredictable and volatile crypto markets remain.

Data on Gecko Terminal shows that TST remains well above its debut price with a market cap of $15.1 million at press time, but the price action shows continued profit booking.

Rise of Token Launchpads and Regulatory Scrutiny

Notably, Four.meme is a BNB chain-based platform that allows users to easily create and launch meme coins. It comes amid a growing trend of token launchpads, which enable users to easily create and launch new cryptocurrencies.

The launchpad joins an already competitive space. Players such as Solana’s Pump.fun, Tron’s SunPump and PancakeSwap’s SpringBoard are already in the market, lowering the barriers for token creation and fostering an explosion of meme coins.

However, the increasing popularity of these platforms has drawn regulatory scrutiny. The UK’s Financial Conduct Authority (FCA) recently warned against Pump.fun. BeInCrypto reported that the regulator cautioned that it may be operating in violation of financial laws.

Additionally, Pump.fun has faced backlash for enabling harmful live streams. Here, bad actors exploited the platform to mislead and manipulate retail investors.

As token launchpads continue to grow, regulatory oversight is expected to increase. Authorities seek to prevent manipulation and protect investors from bad actors.

Two law firms, Burwick Law and Wolf Popper LLP, have sent a cease-and-desist letter to Solana-based token launchpad Pump.fun, alleging it used their intellectual property in the creation and promotion of the controversial meme coin, Dog Shit Going Nowhere (DOGSHIT2). The firms also accused Pump.fun of trying to intimidate their clients.

The allegations come as both firms pursue a class-action lawsuit against Pump.fun, claiming the platform has facilitated widespread securities fraud. They also called out the launchpad for allowing users to create and trade unregistered tokens easily.

DOGSHIT2 Soars Amid Pump.fun’s Legal Woes

On Thursday, the cease-and-desist letter, dated February 5, 2025, was shared on X (Twitter). Burwick Law and Wolf Popper LLP demanded that Pump.fun immediately remove DOGSHIT2 and other tokens allegedly impersonating the firms and their employees.

“…any further unauthorized use of our firms’ names, intellectual property, or association with this token may result in immediate legal action,” the post read.

The controversy surrounding DOGSHIT2 began when Burwick Law submitted court documents in its initial lawsuit against Pump.fun. It included an exhibit demonstrating how easily users could create tokens on the platform. The firm also accused Pump.fun of enabling rug pulls and failed meme coins.

However, crypto analysts quickly noticed that a wallet address referenced in the lawsuit was linked to DOGSHIT2. This revelation led to speculation that Burwick Law or its affiliates had inadvertently created the token.

The law firm has vehemently denied any involvement in launching or profiting from DOGSHIT2. Specifically, they said the token only existed as “memory on the server” until it was purchased and deployed on-chain by an unknown party.

Despite Burwick’s denials, DOGSHIT2 has continued to attract investor interest. At its peak on January 31, the token’s market capitalization exceeded $23 million. While it has dropped to around $8.2 million, according to CoinGecko data, the price has increased by over 200% since Thursday’s session opened.

Pump.fun Platform’s Role in the Dispute

Meanwhile, the main issue in the legal battle is whether Pump.fun knowingly allowed the creation of tokens designed to impersonate law firms and plaintiffs involved in the lawsuit. The law firms assert that Pump.fun has the technical ability to remove the disputed tokens but has refused to do so.

“Burwick Law confirmed that Pump.fun has the technical capability to remove these tokens and has chosen not to act, despite the clear financial and legal risks posed to the public,” the law firm added.

They further claim that Pump.fun’s actions represent an effort to interfere with ongoing litigation, intimidating investors pursuing claims against it. The firms warn that such tactics could undermine the legitimacy of blockchain technology by using it to obstruct due process and manipulate public perception.

Pump.fun has not publicly commented on the allegations of intimidation. However, the launchpad advertises as merely providing an open platform for token generation.

Meanwhile, regulatory scrutiny over meme coin platforms has increased, particularly as high-risk, pump-and-dump schemes proliferate. However, for Pump.fun, this adds to a list of controversies after analysts slammed it for delaying the altcoin season. Most Solana founders also have negative sentiments about the platform.

Nevertheless, it is impossible to forget the Solana meme coin launchpad’s remarkable start to the year. As BeInCrypto reported, the platform recorded a notable $14 million in daily revenue on January 2 and accounted for 52.8% of Solana DEX transactions in December.