Event Overview: $36M Hack and Strategic Pivot
Humanity Protocol, a project originally focused on identity verification on blockchain, is shifting toward enterprise-level AI products after a devastating hack that drained approximately $36 million from its treasury, founder Terence Kwok told The Block. The incident triggered a sharp crash in the price of the project’s native token, H, which fell by about 89% at one point. Kwok revealed that the team is now prioritizing the development of identity and asset verification solutions tailored for AI enterprises, marking a fundamental change in the project's strategic direction.
Attack Details: Phishing Email Compromised Developer Notebook, Not Smart Contracts
Kwok explicitly stated that the hack was not caused by a smart contract vulnerability. Instead, attackers used a phishing email to gain access to a Hiroshima-based Humanity Foundation member's private key, which was stored on a developer notebook. Once the key was compromised, the attackers cross-chain minted and dumped H tokens, flooding the market. The price collapse reflected the market's immediate loss of confidence. This incident underscores the critical importance of securing off-chain private keys, as even robust on-chain code cannot prevent attacks that target operational security.
Remediation Steps: Token Migration, Claims Process, and Global Reporting
Given the extremely low probability of recovering the stolen funds—Kwok admitted the chances are 'very low'—Humanity Protocol is activating a token migration and compensation claims process to restore some trust among token holders. The team has also reported the crime to law enforcement agencies in Hong Kong and multiple other jurisdictions, seeking international cooperation. Concurrently, the project is accelerating the rollout of its enterprise-grade AI identity and asset verification products, aiming to pivot into a new market segment that combines AI with identity verification for businesses. This strategic shift represents a move away from a pure blockchain identity protocol toward a broader, AI-focused enterprise service offering.