Humanity Protocol, a Layer-2 blockchain focused on digital identity for Web3, is facing a major setback after a security breach. The attack, linked to compromised wallet keys, resulted in more than $30 million being drained from wallets associated with the project.
As a result, the H token crashed nearly 90%, dropping to $0.074.
How a Wallet Key Breach Turned Into a Market Meltdown
The incident began after attackers gained access to the private keys of a member of the Humanity Foundation, according to an official statement from the project.
On-chain data shows the exploiter drained funds from at least 17 wallets before rapidly swapping the assets for ETH and BNB through decentralized exchanges, including KyberSwap and PancakeSwap. Analysts tracking the attacker reported that the wallet currently holds roughly $27 million worth of ETH while continuing to offload H tokens into the market.
The aggressive selling triggered a sharp collapse in the token’s price.
Within 24 hours, H fell from around $0.74 to nearly $0.12, wiping out more than 80% of its value and at one point pushing losses close to 90%.
Humanity Protocol Urges Users to Avoid Bridges and Liquidity Pools
Following the attack, the team urged users not to interact with bridges or liquidity pools until further notice.
“We’re aware of a security incident involving the compromise of private keys belonging to a member of the Humanity Foundation,” the project said, adding that it is working with security firms and exchange partners to assess the damage.
The team also stated that core protocol funds remain secure and promised to provide verified updates as the investigation continues.
ZachXBT Questions the Official Explanation
While Humanity Protocol described the event as a security breach, not everyone is convinced.
Well-known on-chain investigator ZachXBT publicly challenged the project’s explanation, suggesting the timing of the incident appeared suspicious. The breach occurred shortly before investor token unlocks, prompting speculation across the crypto community.
“The incident seems possibly staged,” adding that he was not convinced by the team’s explanation.
ZachXBT later called on Humanity Protocol to disclose any active market-maker agreements, stating that the community deserves greater transparency.
The incident has become one of the largest crypto security breaches of the month and could have lasting consequences for Humanity Protocol.
Was this writing helpful?
Story Ends Here
Trust with CoinPedia:
CoinPedia has been delivering accurate and timely cryptocurrency and blockchain updates since 2017. All content is created by our expert panel of analysts and journalists, following strict Editorial Guidelines based on E-E-A-T (Experience, Expertise, Authoritativeness, Trustworthiness). Every article is fact-checked against reputable sources to ensure accuracy, transparency, and reliability. Our review policy guarantees unbiased evaluations when recommending exchanges, platforms, or tools. We strive to provide timely updates about everything crypto & blockchain, right from startups to industry majors.
Investment Disclaimer:
All opinions and insights shared represent the author’s own views on current market conditions. Please do your own research before making investment decisions. Neither the writer nor the publication assumes responsibility for your financial choices.
Sponsored and Advertisements:
Sponsored content and affiliate links may appear on our site. Advertisements are marked clearly, and our editorial content remains entirely independent from our ad partners.
Read the Next News
