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- Humanity Protocol confirmed compromised keys after hackers drained $32 million.
- Attackers minted additional H tokens, worsening selling pressure significantly.
- ZachXBT questioned breach claims as token collapse sparked concerns.
More than $32 million was lost from Human Protocol’s project and the value of its H token plummeted with a major security breach. On-chain investigators allege that hackers obtained the private keys associated with the project and quickly offloaded huge quantities of H tokens to the open market.
This leak caused a sell-off, which drove H down to $0.079, a four-hour low by hours. Later, the token bounced back around $0.12, but is still about 85% lower in the last 24 hours. As blockchain observers noted, the attack soon progressed beyond merely a wallet compromise, as more token supply began to be circulated. As a result, investors began to worry how much of an incident it was and what impact it could have on the project.
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Attacker dumps tokens as new supply enters circulation
The hacker then sold vast quantities of H for ETH, resulting in heavy selling pressure on DEXs, as reported by blockchain analytics. With the token sales ongoing, the market lost faith and the price started to plunge further. According to data from Lookonchain, the attacker has created 100 million H tokens on BNB Chain. The new tokens valued at an estimated $11.4 million, and put strain on the already shaky market.
Furthermore, investigators were able to later uncover another minting event which included an additional 100 million H tokens. The attacker has already token sold 18,510 ETH equivalent to $30.83 million and 1,548 BNB valued at about $924,000, according to Lookonchain. The blockchain also revealed that the exploitster still held around 111m H tokens valued at around $14m. But on-chain liquidity had drastically reduced, making more sales of similar magnitude impossible. Later, Humanity Protocol confirmed that the breach was due to the use of compromised private keys belonging to a Humanity Foundation member.
The team has been alerted to the incident and has started collaborating with security professionals and exchange partners, says its founder, Terence Kwok. Moreover, he also advised users to not engage with the protocol’s bridge and liquidity pools until more information is available. An investigation is ongoing as work continues to mitigate the effects of the attack and secure impacted systems, the project said.
ZachXBT asks team to clarify their answer.
Crypto investigator ZachXBT questioned Humanity Protocol’s account of the events and proposed that they be investigated more thoroughly. He thinks the leak “seems like it might have been orchestrated” and that the official explanation “is not convincing to me.
However, he said, the fact that the H token supply was concentrated caused confusion over whether it was a real theft or a market maker getting out. Moreover, he noted that the token sales were held on decentralized exchanges and not centralized exchanges.
Humanity Protocol is a biometric identity verification system that has secured multiple funding rounds and has reached a valuation of over $1 billion. The new leak has put the project under close watch as investigators scour the attacker’s activity and whereabouts of his held tokens.
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