Humanity hacked for over $31 million, is the team behind it clearing the way for a new project?

Original｜Odaily Planet Daily (@OdailyChina)

Author｜Wenser (@wenser 2010 )

When it rains, it pours. The crypto market has once again been hit by a major security incident with over $30 million in stolen funds.

Early this morning, on-chain monitoring revealed that Humanity Protocol was attacked by hackers, with over 17 wallets holding H tokens compromised, resulting in total losses exceeding $19 million. Subsequently, the scale of the losses expanded to over $31 million. After the successful attack, the hacker quickly converted the H tokens into ETH to facilitate subsequent fund laundering.

Humanity founder Terence later confirmed that the incident was caused by the private key leak of a member of the Humanity Foundation, which was exploited by hackers. Affected by this news, the price of the H token quickly fell below $0.08, a 24-hour drop of over 90%.

Against the backdrop of a slight rebound in the broader market, the "bear market recurring event" has once again played out. Is it an inevitable hack, or is there more to the story?

When Humanity Experiences a "Human Security Incident": Team Member Private Key Leak or Project Team Orchestration?

According to Humanity's official latest response, project founder Terence confirmed that a private key of a member of the Humanity Foundation has been leaked. As a precautionary measure, please do not interact with any cross-chain bridges or liquidity pools until safety is confirmed. The foundation is working with security experts and exchange partners to address the matter and will continue to provide updates. Additionally, the official advises users to temporarily revoke permissions for the project's contract addresses pending further investigation results.

On the other side, the "hacker attack" is still ongoing. According to monitoring by LookonChain, the Humanity hacker minted an additional 100 million H tokens on BSC, worth $11.4 million, and may continue dumping or selling them.

At the time of writing, the address associated with the Humanity hacker holds over 31.35 million H tokens, currently worth approximately $3.82 million; holds about 18,000 ETH, valued at over $30.11 million; its BNB holdings have also increased to 2,443, worth nearly $1.5 million; and is still continuously minting more H tokens.

On-chain address monitoring info for the hacker: https://arkm.com/explorer/entity/dcfac174-1b67-46d6-8cab-5b8e955ca921.

Regarding this major security incident involving over $30 million in stolen funds, on-chain detective ZachXBT also provided his preliminary investigation findings:

He first stated, "Unsure if this is a hack theft or malicious action by the project team. Looking at the chart, given the concentration of supply, the H team was likely working with some active market maker. However, all the H tokens were dumped on decentralized exchanges (on-chain), not centralized exchanges."

Subsequently, he gave a preliminary conclusion: "This 'security incident' was likely orchestrated. I simply don't believe the team's narrative; it's just an excuse concocted by bad actors to cover their tracks." It's worth noting that Humanity protocol's "dubious history" is indeed real.

Humanity Team's Dubious History: Outsourced Tech, Airdrop Fiasco, and Team Controversies

In fact, the crypto community's discontent with Humanity is well-founded.

Previously, when WorldCoin gained fame as an "iris-based identity verification project," Humanity, as a "palm print verification identity security protocol," quickly capitalized on the trending concept. Back then, it gained popularity as one of the partners for KYC or identity verification for numerous crypto project airdrops. However, on the other hand, its back-end team, the touted "palm print security verification technology," and the token airdrop process itself sparked market controversy. For more details, see 《From Palm Print 'Revolution' to Access Control Vendor: Unmasking Humanity's Technological 'Fig Leaf' Double Act》.

Furthermore, in June last year, on-chain investigator Specter pointed out: "After looking into the team structure of Humanity, what's worrying is: of the 4 team leaders, 3 have problematic track records involving mismanagement, litigation, or financial misconduct."

Among them, project founder and CEO Terence Kwok has a prior "entrepreneurial history." His previous venture, Tink Labs, once raised $200 million and had a peak valuation of $1.5 billion, but ultimately collapsed in 2019 due to "mismanagement."

Foundation Head Mario Nawfal had previously defaulted on salaries and was also suspected of improper financing, false promises, and coercing whistleblowers into silence. He also has a series of "tarnished track records": his project Froothie was fined in Australia for false advertising; was sued by Juicero; was accused of invoice manipulation during his tenure at NFT Tech; and was involved in controversial transactions with BitClout tokens.

As for Yat Siu, founder of Animoca Brands, one of Humanity's backers, his company was previously delisted from the Australian Securities Exchange due to regulatory violations in blockchain and cryptocurrency investments.

Given Humanity's past incidents, including the exposed "Shenzhen technical outsourcing," large-scale Sybil attacks during token airdrops, and loyal users receiving single-digit airdrop values, it's hard not to suspect ulterior motives behind this theft.

Apparent Theft, or a Cunning Disguise? Humanity Team Accused of Moving to New Project

Soon, more information was leaked by the crypto community and on-chain detective ZachXBT.

After suggesting that the Humanity theft might be a setup, ZachXBT again questioned Humanity's official team: "Did you think the crypto community would blindly believe your narrative just because you hyped your token for weeks without any substantive basis? Please first disclose all your active market-making agreements with Hong Kong-related entities."

Subsequently, he posted a tweet from crypto KOL Irene Zhao, which mentioned: "2 years ago, I got a 100x return on my KOL round investment in the H token; now, I've also participated in the KOL round financing for Everything, the new project incubated by the Humanity team."

In January this year, Everything, which brands itself as an "all-in-one exchange," announced the completion of a $6.9 million seed round, led by Humanity Investments, the venture arm of Humanity, with participation from Animoca Brands, Hex Trust, WallStreetBets creator Jamie Rogozinski, and Three Point Capital. The platform emphasizes its advantage lies in integrating perpetual contracts, spot markets, prediction markets, and payment functions.

Looking back now, with the familiar scent (combining current hot topics) and the familiar recipe (similar investor teams), we often have to admire the keen acumen and exceptional execution of these "veteran entrepreneurs." As for the KOLs and investors involved, perhaps all interests have already been divided behind the scenes, and the losses can only be left to the token traders on the stage.

Of course, in the crypto market, projects and token prices are always two sides of the same coin. As for how the H token price will perform in the future, it may depend on the Humanity project team's handling plan and the market maker's performance on the stage.