A private-key compromise targeting a foundation member of decentralized identity project Humanity Protocol has resulted in approximately $32 million in stolen H tokens being swapped for ether on open markets. The aggressive selling triggered an 80% collapse in the token's price. The project confirmed the breach publicly, identifying the attack vector as unauthorized access to a foundation wallet's private keys rather than a smart contract exploit. Decentralized identity protocols rely heavily on trust in their key management infrastructure, making such breaches particularly damaging to user confidence. The incident raises fresh concerns about the security practices of foundation-controlled wallets in blockchain projects, where a single compromised key can expose significant treasury or vested token holdings to irreversible loss.
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