I would start by collaborating with the player out of game.
"You threw us such an awesome curveball when you decided to ally with Asmodeus! Obviously this pits you against the party who is trying to protect the treasure - how did you envision playing this out?"
Give them options and suggestions to riff off of:
- Were you thinking of having your PC become an evil NPC?
- If we're going the NPC route, how about you give some some broad direction about how to run your now-villan of the campaign session by session?
- If you did still want to keep playing this character, how were you thinking that would work?
- If you didn't think ahead to playing an enemey of the party, do you want to try an arc were perhaps you were posessed by the bad guy and your party needs to bring you back to the good side?
- If this is a double agent story, what kind of affliction do you want your character to suffer?