The stability of crown pillar is critical during the transition from open pit to underground mining. Mining-induced fractures in the pillar form water seepage channels, which can cause potential water inrush hazards. A microseismicity-based method to establish seepage channel network and assess damage state of rock mass in the pillar is proposed. The formation processes of seepage channels and associated rock failure mechanism were analyzed. First, the spatiotemporal evolution of the microseismic (MS) events was presented, based on which the development process of the fractured zone was determined. Second, moment tensor inversion (MTI) was utilized to interpret the focal mechanism of the MS events. A 3D rose diagram was utilized to measure the fracture orientations and determine the main fracture surfaces, and a fracture network was subsequently established. Meanwhile, the distribution characteristics of the fracture radii and volumes were discussed. The results show that shear fractures were dominant in pillar and accounted for more than 90% of all MS events. The overall damage tensor of the pillar was subsequently assessed based on the MS-derived fractures, and the maximum damage direction was determined. Third, a fast chronological expansion method was proposed to iteratively build a connected network with a combination of MS event locations and the corresponding fracture orientations. The MS-derived connected network was used to estimate the distances of event-to-event seepage, from which the shortest seepage channel from each individual event to the network was determined in chronological order. Seepage channels between hydraulic recharge and discharge points were inferred. These results could be helpful for better characterization of seepage channel development and the implementation of pillar reinforcement.