Crypto hacks and exploits are becoming increasingly common, with investors losing millions of dollars as popular tokens collapse almost instantly following security breaches. These incidents have further undermined confidence in the digital asset industry, contributing to the prolonged crypto winter and heightened market volatility.
Humanity Protocol and Mantra Hacks
Just this week, Humanity Protocol became the latest victim after hackers drained over $30 million following its recent exponential surge. Before the hack, the H token surged to a record high of $0.8587, up over 1,700% from its lowest point this year, and its market cap soared to over $2 billion.
The Humanity Protocol token soared because it was widely seen as an artificial intelligence (AI) coin, as demand for human verification will likely continue to rise in the near future as AI agents become more popular. Besides, Sam Altman, OpenAI’s founder, has already pitched the idea and launched a similar crypto project, Worldcoin.
According to Humanity, the protocol experienced a private key compromise, which allowed hackers to steal over $30 million. The network also saw the minting of over 100 million coins, with the team saying that it was investigating and offering a $1 million reward.
Before Humanity, the other most notable collapse was Mantra, a network that promised to disrupt the real-world asset (RWA) tokenization industry. It also offered some of the highest staking rewards in the crypto industry, with the OM token yielding over 15%.
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Mantra became more popular when the team announced some major deals, including plans to tokenize several real estate projects in Dubai. Then it all came tumbling down in April last year when the token plunged, with its market capitalization falling from $7.8 billion to just $11 million today.
The team blamed the crash on forced liquidations by key exchanges. Analysts, however, believe that this crash was a coordinated process by insiders and their investors.
Crypto Hacks Have Soared This Year
Data shows that crypto hacks have jumped in the past few months. Crypto investors have lost over $1.48 billion in the last 12 months. Some of the most notable hacks were KelpDAO’s $293 million, Drift Trade’s $285 million, Balancer’s $128 million, and Nobitex’s $82 million.
These hacks will likely continue in the foreseeable future because of how the crypto industry is regulated. In the United States, the Trump administration has largely removed the guardrails and ended lawsuits against top companies such as Uniswap, Kraken, Ripple, and Coinbase.
The industry is also hard to regulate because of the anonymity of its processes. For example, anyone can launch a global project without registering. This is very different from the stock market, where companies are required to file key documents that must be accurate and verified.
The growing number of crypto hacks has contributed to the ongoing crypto winter, as investors are not confident enough to invest their cash in top tokens.
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