Original｜Odaily Planet Daily（@OdailyChina）
Author｜Wenser（@wenser2010）
The leaky house was unfortunate with the rain coming down; the cryptocurrency market once again faced a massive security incident with stolen funds exceeding 30 million dollars.
Early this morning, on-chain monitoring showed that the Humanity Protocol was hacked, with over 17 wallets holding H tokens being compromised, resulting in total losses exceeding 19 million dollars; subsequently, the scale of the losses expanded to over 31 million dollars. After the attack was successful, the hacker quickly exchanged H tokens for ETH to facilitate subsequent money laundering.
Humanity founder Terence later confirmed that the incident was due to the private key leak of a member of the Humanity Foundation, which was exploited by hackers. Following this news, the price of H tokens rapidly fell below 0.08 dollars, with a drop exceeding 90% within 24 hours.
With the market slightly rebounding, is the “bear market reserved program” being replayed? Is it that hackers are hard to defend against, or is there more to it?
When Humanity experiences a “human security incident”: Private key leak of team members OR intentional planning by the project party?
According to the latest response from Humanity, project founder Terence confirmed that the private key of a member of the Humanity Foundation had been leaked. As a precaution, they advised against interacting with cross-chain bridges or any liquidity pools until security is confirmed. The foundation is working with security experts and exchange partners to address the matter and will continue to update progress. In addition, the official suggested users temporarily revoke permissions to the project contract address until further investigation results are disclosed.
On the other side, the “hacker attack” continues. According to monitoring by LookonChain, the Humanity hacker has emitted 100 million H tokens on BSC, valued at 11.4 million dollars, and the dumping may continue.
As of the time of writing, the Humanity hacker's corresponding address holds over 31.35 million H tokens, valued at approximately 3.82 million dollars; approximately 18,000 ETH, valued over 30.11 million dollars; their BNB holdings have also increased to 2,443 coins, valued near 1.5 million dollars; and they are still continuously emitting H tokens.
Monitoring information for the hacker's on-chain address can be found at: https://arkm.com/explorer/entity/dcfac174-1b67-46d6-8cab-5b8e955ca921.
Regarding this massive security incident with stolen funds exceeding 30 million dollars, on-chain detective ZachXBT also provided his preliminary investigation conclusion:
He first stated, “It’s uncertain whether this is a hacker theft or malicious behavior by the project party. From the K-line chart, considering the concentration of supply, the H team likely collaborated with an active market maker. However, all H tokens were sold on a (chain-based) decentralized exchange, not on a centralized exchange.”
Subsequently, he gave a preliminary conclusion: “This ‘security incident’ is likely to be planned. I do not believe the corresponding explanation of the team at all; this is merely an excuse fabricated by those with ulterior motives to escape responsibility.” It is worth mentioning that Humanity project's “dark history” indeed exists.
Humanity team's dark history: Technical outsourcing, airdrop farce, and team scandals
In fact, the dissatisfaction of the cryptocurrency community towards Humanity has its reasons.
Previously, when WorldCoin gained fame due to its “human iris verification project,” Humanity, as a “palmprint verification identity security protocol,” quickly seized the trending concept. At that time, it was one of the partners involved in airdrops for KYC or identity verification in many cryptocurrency projects, but on the other side, the team behind it, the “palmprint security verification technology” it promoted, and the token airdrop segment sparked controversy in the market. For more details, see “From Palmprint 'Revolution' to Access Control Vendors, Unveiling the Dual Facade of Humanity Technology”.
Moreover, last June, on-chain investigator Specter pointed out, “After understanding the team composition of Humanity, it is concerning: Out of the four team leaders, three have problematic past records involving poor management, lawsuits, or financial violations.”
Among them, the project founder and CEO Terence Kwok has a previous “entrepreneurial history.” His founded Tink Labs once raised 200 million dollars, reached a peak valuation of 1.5 billion dollars, but ultimately closed in 2019 due to “poor management.”
The head of the foundation, Mario Nawfal, had previously withheld salaries and was also alleged to have engaged in improper fundraising, false promises, and coercing whistleblowers to maintain silence. He has a series of “dirty records”: the project Froothie was fined in Australia for false advertising; sued by Juicero; while working at NFT Tech, was accused of manipulating invoices; and had controversial actions in BitClout token trading.
As for one of Humanity's backers, Animoca Brands founder Yat Siu, he previously had his company delisted from the Australian Securities Exchange due to violations in blockchain and cryptocurrency investment.
In addition to the previously exposed “Shenzhen technical outsourcing” incident, the massive witch hunt for token airdrops, and loyal user airdrops valued in single digits, it is hard not to believe that there is more to this theft incident.
Seemingly stolen, but actually a cunning escape? Humanity team accused of shifting to a new project
Soon, more information was leaked out by the cryptocurrency community and on-chain detective ZachXBT.
Pointing out that the Humanity theft incident may be planned, ZachXBT again questioned the Humanity officials: “You choose to hype your token for weeks without any substantial evidence, do you think the cryptocurrency community will blindly believe your statements? Please disclose all active market-making agreements you have with entities related to Hong Kong.”
Subsequently, he even shared a tweet from cryptocurrency KOL Irene Zhao, which mentioned: “Two years ago, I made a 100 times return on investment in the KOL round of H tokens; now, I am also participating in the KOL round financing of the new project Everything incubated by the Humanity team.”
In January of this year, Everything, which emphasized the concept of “one-stop exchange,” announced the completion of 6.9 million dollars in seed round financing, led by Humanity’s venture capital department Humanity Investments, with contributions from Animoca Brands, Hex Trust, WallStreetBets creator Jamie Rogozinski, and Three Point Capital. The platform emphasizes its advantages in combining perpetual contracts, spot markets, prediction markets, and payment features.
Now looking back, a familiar taste (combined with current hot topics), a familiar formula (similarly composed investor team), many times, we have to admire the keen sensibility and extraordinary execution power of these “veteran entrepreneurs.” For KOLs and investors who dive in, perhaps all the benefits have already been divided behind the scenes, leaving the losses only for the token traders on stage.
Of course, in the cryptocurrency market, projects and token prices are always two sides of the same coin; regarding how H token prices will perform next, it may still depend on the Humanity project party's handling scheme and the market maker's stage performance.
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