Latest / The Starting Block / Breaking Down The Humanity Protocol Exploit with Founder Terence Kwok

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Breaking Down The Humanity Protocol Exploit with Founder Terence Kwok · The Starting Block

4:29
Good afternoon, ladies and
4:30
gentlemen, welcome back to the
4:32
starting block. If you joined us
4:33
earlier this week, we were in Abu
4:35
Dhabi for a very special interview
4:36
with Binance founder
4:38
Changping Zhao, you know him as
4:40
CZ. If you missed that interview,
4:42
you can go onto the blocks X account
4:44
right now and pinned at the top
4:46
of our handle is a link to
4:48
the live stream.
4:49
We are also producing a long form
4:51
version of that interview that
4:52
you'll be able to find on our
4:53
YouTube channel in the next day or
4:55
so. So just keep it locked on our
4:56
social media.
4:57
Channels and you'll be able to find
4:59
that full interview with CZ.
5:01
It went viral this week and it was a
5:03
really great way to start the show.
5:04
Today is the first time we are
5:06
broadcasting live virtually and
5:08
we've got a stacked show coming up.
5:10
We've got Andre Dragos from Bitwise
5:12
Europe to give us a
5:14
markets update on the market pulse
5:16
and then later on in
5:18
the show we're going to be talking
5:19
to Humanity Protocol founder Terence
5:21
Kwok about the $36 million
5:23
that exploit that took place last
5:25
month. So we've got a jam packed
5:26
show. But we're going to be jumping
5:28
first up into our
5:30
block briefing, which is our news
5:32
update.
5:33
Before we get into that, let me just
5:35
give you a quick rundown of the
5:36
show, because this is the first time
5:37
we're doing the format like this.
5:38
We will have the block
5:40
briefing to start off the show.
5:42
We'll have the markets pulse, which
5:43
will be a daily markets update with
5:45
Andre Dragos and a number of other
5:47
fantastic markets analysts.
5:49
And then we will be diving into a
5:51
interview with a top newsmaker or
5:53
figure in the industry every day.
5:55
That's called the hot seat.
5:56
So that's what you can expect from
5:57
the starting block every day.
5:59
It's a great pleasure to bring you
6:00
the blocks daily live show.
6:02
I am broadcasting here in the
6:04
Netherlands.
6:05
My right hand man, Jordan Leach, is
6:07
behind the scenes producing the show
6:09
based in Berlin as well.
6:11
It's great pleasure to finally
6:12
launch the show virtually.
6:14
And without further ado, let's jump
6:16
into our market segment.
6:21
And so our first story today,
6:24
Securitize to debut on the New York
6:25
Stock Exchange after gaining a
6:27
final nod for their merger.
6:30
It's a big day for tokenization.
6:32
Securatize officially begins trading
6:33
on the new York Stock exchange this
6:35
morning under the ticker, Canter
6:37
Equity Partners.
6:39
Shareholders gave the final green
6:40
light on its back merger.
6:42
The deal locks in around $400
6:44
million in capital and
6:46
Securitas which runs BlackRock's
6:48
tokenized Biddle Fund.
6:50
Says going public gives it the
6:52
credibility to lead the next phase
6:54
of tokenization.
6:56
Real-world asset tokenization has
6:57
already grown by 128%
7:00
over the past year to nearly $22
7:02
billion, and today's listing
7:04
puts one of its biggest
7:06
infrastructure players in
7:08
the public market's spotlight.
7:10
Our second story of the day,
7:12
MetaPlanet adds 2,823
7:15
Bitcoin to its holdings
7:16
in Q2.
7:18
They just keep stacking just a
7:20
little bit slower.
7:21
The Tokyo-based listed
7:23
Bitcoin treasury firm bought 2,823
7:26
Bitcoin in the second quarter of
7:28
2026, spending roughly
7:30
222 million
7:33
dollars, which is
7:35
roughly $78,600
7:37
per Bitcoin, bringing
7:39
its total Bitcoin holdings to
7:41
43,000.
7:42
That's a notable slowdown from the
7:44
17 000 bitcoin it
7:46
scooped up back in q3
7:48
last year as Bitcoin itself
7:50
dropped 20% over the quarter.
7:53
MetaPlanet is still targeting
7:54
100,000 Bitcoin by year
7:56
end and 210,000
7:58
BTC by the end of
8:00
2027.
8:02
Its Tokyo listed shares rose three
8:04
and a half percent on the news
8:06
overnight.
8:07
Then our third story today, FBI
8:09
Director Kash Patel
8:11
discloses a six-figure
8:13
strategy stock purchase months
8:15
after a trade.
8:16
It's quite a salacious story.
8:18
That has come out overnight.
8:20
A late paperwork problem for the
8:22
FBI's top cop director, Cash Patel,
8:24
disclosed a six-figure purchase of
8:26
strategy stock as between $100,000
8:29
and $250,000
8:31
about six months after actually
8:33
making the trade back in
8:35
November. That's according to an
8:37
NOTUS report citing federal
8:40
ethics filings.
8:41
Patel says it was an inadvertent
8:43
omission, and the FBI says
8:45
corrective paperwork has already
8:47
been approved.
8:47
With no fine issued.
8:50
It puts one of the country's top law
8:52
enforcement officials in one of Wall
8:53
Street's most wanted Bitcoin
8:55
proxies.
8:56
Strategy stock jumped 7.5%
8:59
on Wednesday to close at $93.39.
9:04
A bit of a crazy story there, and
9:05
it'll be interesting to see how
9:08
the internet continues to react as
9:10
Cash Patel comes up
9:12
as a big strategy holder.
9:15
Our next story today, Trumped back
9:16
American Bitcoin sets a one
9:18
for 15 reverse stock split.
9:20
Eric Trump and Don Jr's American
9:22
Bitcoin is taking drastic
9:24
action to stay listed.
9:25
The miner will execute a one for 15
9:28
reversed stock split
9:30
this week, shrinking its
9:32
shares count from roughly 1.09
9:34
billion.
9:35
Down to 73 million
9:37
shares, after their shares sank to
9:38
a record low of 64
9:40
cents.
9:41
That's a bid to stay above the
9:43
NASDAQ's $1 minimum
9:45
bid rule.
9:46
And despite an $82 million
9:48
first quarter loss, the
9:50
company kept buying Bitcoin and
9:52
now holds 7,500
9:54
BTC, making it the
9:56
16th largest public holder,
9:58
even as Bitcoin itself is down
10:00
30% year
10:02
to date.
10:03
Our next story.
10:04
Kalshi and PolyMarkets combined
10:06
volume surges 75%
10:08
to 45 billion in June
10:10
amid FIFA World Cup
10:12
fever.
10:13
Prediction markets are having a
10:14
moment. Kalshian PolyMarket's
10:16
combined monthly trading volume
10:18
jumped 75% in June to a
10:19
record $44.8 billion.
10:22
And that's fueled mainly by FIFA
10:24
World cup mania.
10:26
Kalsi led the charge growing 87.5%,
10:29
87% rather to 31.5
10:31
billion. While Polymarket's main
10:33
platform pulled in over $10
10:35
billion.
10:36
Kelshe's World Cup winner market
10:37
alone has drawn more than $832
10:39
million in bets, but that
10:41
growth is coming under a legal cloud
10:43
as more than a dozen states are
10:45
now suing Kelshey and Polymarket
10:47
over sports contracts they
10:49
call unlicensed gambling.
10:53
And onto another story
10:55
from the stock markets, Venice AI
10:56
raises $65 million
10:58
in its Series A to
11:00
be valued at one billion.
11:02
A big ARI raise in
11:04
crypto's backyard, Eric Voorhees'
11:06
privacy-focused AI startup, Venus,
11:08
has closed a $65 million Series
11:11
A, which was led by Dragonfly,
11:13
and that values the company at a
11:14
billion dollars.
11:15
Investors will get 8.98%
11:18
equity stake plus token warrants
11:20
on VVV, but notably
11:22
Voorheas chose to sell equity and
11:24
not tokens.
11:25
He says, Venus hasn't sold a single
11:27
VVT token despite
11:29
the token ripping more than 700%
11:31
this year.
11:32
The cash will fund Venice's own
11:34
data centers as it aims to
11:36
scale into a mass market alternative
11:38
for chat GPT.
11:41
A big, big day for anyone holding
11:43
VVV tokens.
11:44
Then onto our final story,
11:46
before we move on to the markets
11:48
polls, the crypto hacks fall
11:50
7% in June to 76 million
11:52
as Humanity Protocol tops
11:54
that list.
11:56
It's some good news on the security
11:57
front though, crypto hacks.
11:59
And hackers stole about
12:01
$76 million across 40
12:03
incidents in June, according to
12:05
PexShield. That's down from 7% in
12:07
May.
12:08
Of course, Humanity Protocol's
12:09
exploit topped that list and
12:11
followed by a $10 million hit on
12:12
the Syscoin bridge.
12:14
Even a well-known MEV bot got
12:16
drained for $7.5 million.
12:18
Total hack losses for 2026
12:20
now sits above $750
12:22
million, but most of that is
12:24
still driven by two massive North
12:26
Korean-linked attacks.
12:27
Back in April, and we, of course, we
12:29
all know DeFi protocols have
12:31
been in the crosshairs over
12:33
the last few months.
12:34
We will be talking to Terence Kwok
12:35
from Humanity Protocol a
12:37
little bit later on the show, so
12:39
please do stay with us.
12:40
We're going to take a very short
12:41
break, and we'll be back with
12:43
the Market's Pulse with Andre
12:45
Dragos, who's the head researcher
12:46
at Bitwise Europe.
12:48
Don't go away.
15:34
Welcome back to The Starting Block.
15:36
If you're just joining us, my name
15:37
is Gareth Jenkinson.
15:37
I'm the host and head of multimedia
15:39
here at The Block.
15:40
This is our daily show
15:42
that we launched this week.
15:43
If you missed that, we launched with
15:44
a very special interview with
15:46
Binance founder, CZ.
15:47
If you want to go and check out that
15:49
interview, you can go to theblock.co
15:51
on Twitter, right at the top of our
15:53
timeline pinned is our full
15:55
interview with CZ, we're also busy
15:57
packaging that up for
15:59
a YouTube as well.
16:00
So... If you want to watch that on
16:01
YouTube, we will have that up in the
16:03
next 24 hours or
16:05
so. It's time for the markets polls.
16:06
If you're joining us for the first
16:07
time, this is our full stack
16:09
markets update.
16:11
I've called up my good friend,
16:13
Andre Dragos, who is the head of
16:14
research at Bitwise Europe, one of
16:16
my favorite commentators and
16:18
analysts when it comes to
16:19
everything, Bitcoin and the wider
16:20
cryptocurrency markets.
16:22
First things first, Andre, it's
16:23
great to have you on the show.
16:26
Yeah, awesome.
16:28
It's been an interesting week,
16:30
Andre. I think, you know, seeing
16:32
Bitcoin dip below the $60,000
16:34
mark and now back up over
16:36
$60.000.
16:37
Maybe you want to break it down for
16:39
us and tell us what you think has
16:41
been driving this sort of volatility
16:43
and this rebound up over
16:45
$60,000.
17:31
Reason for the stunt.
17:33
Side is volatility
17:35
and threat fire, right, in
17:36
traditional financial markets.
17:38
I think there are increasing
17:40
worries about the AI
17:42
bubble, right? And this, it is a
17:43
bubble, right?
17:44
You look at valuations across
17:48
semis, but like the stock market
17:50
in general, it's at
17:52
either at dot com levels or even
17:53
higher, right record highs.
17:56
And record valuation in
17:58
itself, they're not like the
17:59
necessary conditions for crash.
18:02
Or the sufficient condition for a
18:04
crash, but definitely the necessary
18:05
condition.
18:07
But I think what's the sufficient
18:08
conditions is essentially tightening
18:10
monetary policy, right?
18:11
And I think since
18:14
FED's debut as
18:16
the new FED chair, worse
18:18
debut as a new Fed chair, I think
18:20
there's increasing,
18:22
there are more question marks around
18:24
the path of US monetary policy.
18:26
And it looks like he's...
18:29
Surprisingly hawkish right if
18:31
he's committed to bringing down
18:33
inflation back to 2%
18:35
Conflation back to percent.
18:37
I think that could create
18:39
more tightening financial conditions
18:40
down the road and
18:43
This this is definitely headwind for
18:45
for the traditional stock market
18:47
and with like high valuations, but
18:49
also for Bitcoin Because
18:51
that to be honest if you look at
18:53
correlations between Bitcoin and the
18:54
NASDAQ It's still
18:56
very much elevated, right?
18:58
So I think that's
19:00
the key risk right now and
19:02
if you've been following the
19:05
news overnight, you've probably seen
19:07
the downside in the Korean stock
19:08
market, right?
19:09
So some key
19:12
AI adjacent markets,
19:13
they're coming under pressure
19:15
already, right.
19:16
And so I think these are
19:18
the main, yeah,
19:20
talking points right now.
19:22
Yeah, I found it very interesting
19:24
to see, you know,
19:26
a metric showing that there's
19:29
a wide, wide scale sort of
19:31
large accumulation
19:33
of Bitcoin at these
19:35
levels.
19:36
How are you seeing that play out in
19:37
the sort of, you know,
19:39
in the context of over $4
19:41
billion in ETF
19:43
outflows over the past kind of six
19:45
weeks?
19:47
That's true. I mean,
19:48
these accumulations,
19:51
they are real, right? If you look at
19:53
these accumulations and also weigh
19:55
it based on the variations itself,
19:57
right.
19:58
I think the degree
20:00
of accumulation is at the highest
20:02
level since FTX, right,
20:04
so it's definitely remarkable.
20:06
The highest in four years,
20:07
essentially.
20:09
And usually you
20:11
tend to see at least
20:13
two episodes where accumulation
20:15
spikes during the bottom.
20:17
And in my view, that was at least
20:19
the first sign that we're
20:21
approaching the cycle bottom.
20:23
I don't think we're quite there
20:25
yet. I think.
20:27
We've seen a lot of pain
20:29
already in many on-chain
20:31
metrics such as the essential of
20:33
supply and loss, but other metrics
20:35
such as the percentage
20:37
of entities and loss percentage
20:39
of addresses and loss they've even
20:42
been lower in previous
20:45
during previous bear cycle bottoms.
20:47
And so I think there's
20:49
still some downside left although
20:51
that's probably relatively
20:53
low, right, compared to the upside
20:55
at these levels.
20:56
I think risk rewards are already
20:58
very attractive at these
21:00
level, and I think what's
21:02
only missing at this
21:04
point is that you have some kind
21:06
of upside catalyst, right?
21:09
And I think, what has
21:11
usually or what has historically
21:13
provided this kind of upset catalyst
21:14
is monetary
21:16
policy easing, right.
21:18
So money printing and I
21:20
think.
21:21
As AI stocks come
21:22
under increasing pressure,
21:24
I think this probability starts
21:27
to increase.
21:29
And I think chances are quite high
21:31
that you start to see
21:32
at least a relative outperformance
21:34
of Bitcoin vis-a-vis
21:37
AI stocks and also the general
21:39
stock market at some point,
21:41
because Bitcoin tends to be this
21:42
canary in the coal mine, macro coal
21:44
mine.
21:45
It tends to anticipate shifts
21:47
in global liquidity, well in advance
21:49
and also monetary policy conditions,
21:51
right? So I think Bitcoin
21:53
has anticipated this kind of
21:55
tightening.
21:56
That's why we're in a bear market
21:57
essentially since October, right.
21:59
But in my view, it will also
22:01
anticipate this
22:03
kind of shift to the upside, right,
22:05
and I think that shift to
22:06
the upside will be
22:08
caused eventually by some kind of
22:11
correction in the stock market and
22:13
then some kind of increasing.
22:16
Probability for FET-monoclonal
22:18
seizing.
22:20
Yeah, that FOMC meeting
22:22
is at the end of July, so it'll be
22:23
interesting to see how that moves
22:24
crypto.
22:25
Before we finish off with a question
22:27
regarding that, I just wanted to get
22:28
your thoughts on
22:30
altcoin underperformance and the
22:31
risk appetite there.
22:32
We've seen Ethereum, SOL and XRP
22:34
falling alongside Bitcoin in June,
22:36
XRP down as much as 20%
22:39
in similar moves to the others.
22:41
Do you see this as being baited to
22:42
Bitcoin's move, or is there
22:44
anything altcoin specific that's
22:46
playing a part here?
22:48
I think it's more the former.
22:50
So what was very consistent
22:52
with last week's price action is
22:55
this kind of altcoin
22:56
underperformance because usually
22:58
these alt season indices
23:01
or altcoin outperformance,
23:03
underperformance,
23:05
it's generally kind of
23:07
good risk on risk off
23:09
gage rate for the broader crypto
23:11
markets.
23:12
And so I think that was totally
23:14
consistent with the price action
23:15
that we've seen.
23:16
So this is all coming out of the
23:17
performance.
23:18
But I also think, at least in the
23:20
short term, it's long in the tooth,
23:21
right?
23:22
I mean, apart from that, we've
23:24
seen some idiosyncratic
23:26
outperformance, for instance,
23:28
hyperliquid most famously,
23:30
right.
23:31
And I think the market has
23:33
been very specific,
23:35
very selective, right,
23:38
in terms of fundamentals.
23:39
And I mean to be honest,
23:41
the fundamental of hype, they look
23:42
incredible, right so it was
23:44
no surprise that
23:46
the token was taking off.
23:49
But of course, more recently, you've
23:50
seen the correction in Hive as well.
23:52
But I think, yeah,
23:55
I think the overall altcoin
23:56
outperforms slash underperforms was
23:58
pretty much consistent so far
24:00
and at least long in the tooth
24:02
in the short term.
24:03
And I think at these kinds of
24:05
levels, it's rather
24:07
asymmetric to the upside as well,
24:09
at least in the shorter term.
24:11
Question to you before we say
24:12
goodbye and bring on Terence Kwok
24:13
from Humanity.
24:15
That FOMC meeting is supposed to
24:17
be July 20, 2029,
24:19
and some of the comments from Fed
24:20
officials have already been moving
24:22
to crypto, Bitcoin's
24:24
above 60K on some dovish sounding
24:26
remarks about inflation cooling.
24:28
How much do you see the next leg for
24:29
Bitcoin being
24:31
a bit of a Fed trade at this point
24:33
versus very crypto
24:35
native catalysts?
24:38
So as far as Fatmoshi policy
24:40
is concerned, I think there were
24:41
some recent remarks by
24:43
Walsh during the Cintra meeting
24:45
in Portugal, at
24:47
the Central Bank meeting.
24:50
So he still has this
24:52
kind of hawkish tone, right?
24:54
And if you're following other
24:57
FOMC members, they're also pretty
24:59
much hawk-ish.
25:01
That said, I think the most
25:03
recent NFP print was
25:05
pretty bearish
25:07
for the economy, actually, which is
25:09
good for monetary policy.
25:11
So I think that will
25:13
provide some kind of breathing room,
25:15
at least in the short term,
25:17
for risk assets rally.
25:19
But in my view, I thin inflation
25:21
will probably stay elevated
25:23
because the strata a
25:25
moose situation is not really
25:27
resolved, right?
25:28
If you were.
25:29
At the maritime traffic post
25:31
the memorandum, right?
25:34
It started to accelerate after
25:36
the memoranda was signed, but
25:37
then it started to reverse lower
25:39
again, right, and still
25:41
hasn't really recovered, and there's
25:43
no real positive trend
25:45
yet, right.
25:46
So, and so I think this kind of
25:48
supply deficit
25:50
in the oil market and especially
25:52
petroleum products like gasoline
25:54
that tend to be key drivers of
25:56
inflation, right, gasoline prices.
25:59
I think it
26:03
will stay, and
26:04
so I think
26:06
as long as this kind of supply
26:08
deficit and all of these distillers,
26:10
especially gasoline, isn't resolved,
26:12
inflation will probably continue to
26:14
surprise the upside.
26:17
Perfect.
26:18
Andre, thank you so much for taking
26:19
the time to chat to us.
26:20
If you don't already go and follow
26:22
Andre online, you can find
26:24
him on X, Andre Dragos.
26:26
He's the head of research at
26:28
Bitwise EU, one of my favorite
26:30
market commentators and analysts out
26:32
there. Andre, we look forward to
26:34
having you back on the show, hopefully
26:35
sometime next week.
26:36
Until then, have a
26:38
fantastic weekend.
26:39
I know it's only Thursday, but
26:40
Friday's as good as a holiday
26:42
in European summer.
26:44
Don't go away, ladies and gentlemen,
26:46
because we're going to have Terence
26:47
Kwok from Humanity Protocol joining
26:48
us for an exclusive conversation.
26:50
It's the first time he's talking to
26:51
the media since the Humanity
26:54
Protocol exploit, which took place
26:55
a few weeks ago.
26:56
So we're gonna be chatting to him
26:57
about what has happened, what is
26:59
going to happen, and everything
27:01
there. So don't run away.
27:02
We'll be back in a couple of
27:03
minutes' time.
30:51
Welcome back to the starting block.
30:52
We are wrapping up the show with the
30:54
hot seat. If you don't know what
30:55
that is, it's a in-person
30:58
or live interview with big
31:00
names in the industry to talk about
31:01
the biggest topics in the history.
31:03
Of course, we are joined today
31:05
by Terence Kwok, you'll know him as
31:06
the founder of Humanity Protocol.
31:09
Unfortunately, Humanity protocol was
31:11
the victim of a
31:13
massive exploit, $36 million
31:15
in June, 2026,
31:18
caused by a compromised developer
31:19
laptop. It's the first time we're
31:21
chatting to Terrence about this.
31:24
I do believe as well it's the first
31:25
time anyone in the crypto media
31:27
landscape has been chatting to you.
31:29
So Terrence, thank you so much for
31:31
taking the time. The last time we
31:32
saw each other was a couple of years
31:33
ago, proof of talk in Paris.
31:35
So unfortunate circumstances to be
31:37
chatting to you but first things
31:38
first, how are you?
31:40
I'm good. I mean, it's been a couple
31:42
of weeks now, so getting a little
31:44
bit better.
31:46
You know, a lot of my plans for
31:49
summer, Europe, all of that stuff
31:50
has been canceled as a result
31:52
of this.
31:54
So, stuff in Asia, handling the
31:57
aftermath.
31:57
Of the object.
32:06
It's having to deal with.
32:06
A lot of these issues.
32:09
Terrence, let's just take it back a
32:10
few weeks and if you can, just give
32:11
us your version of events,
32:13
what happened when you first
32:15
found out about the exploits and
32:17
how difficult it was to pin down
32:19
what had actually happened that led
32:21
to the draining of
32:23
tokens and the entire situation.
32:26
Yeah, so it happened at
32:28
around, I remember it was,
32:30
it was just after midnight on one
32:32
day.
32:34
Luckily, I was actually in the
32:35
office, because it
32:38
was it was past midnight, it was,
32:40
I had some team members who were in
32:42
town, from overseas, and
32:43
I was taking them out for dinner.
32:45
And then came
32:47
back to the office and started
32:48
talking about some more stuff.
32:51
And then we had these monitors
32:53
set up.
32:55
For token movements.
32:56
Essentially, I think a lot of
32:57
project teams have been set up for
33:00
large amounts of movements.
33:02
And then we started seeing alerts
33:04
coming on and
33:06
then we just couldn't figure
33:08
out what was going on.
33:10
And then, we started saying, for
33:12
example, bridge was getting drained.
33:15
All sorts of things were happening.
33:17
And then I started calling
33:19
up people within
33:22
the team.
33:23
Some were overseas, some
33:25
were in town, and
33:28
then the
33:30
first thing we were trying to do was
33:31
figure out, number one, what was
33:32
happening.
33:34
At that point, we realized, okay,
33:35
there were compromised keys,
33:38
and it
33:40
was figuring out what the
33:42
best next steps were.
33:43
So it was contacting exchanges,
33:46
it was trying to freeze the token,
33:48
and and it
33:50
was just...
33:50
A full-on panel during
33:54
the first
33:56
12 to 24 hours
33:58
of the experience.
34:02
And it had been a compromised
34:04
laptop that led to this.
34:06
And just for context as well, this
34:08
isn't the first time this happened.
34:09
Last year with the Bybit exploit
34:12
where they lost $1.5
34:14
billion of ETH, it was
34:16
a similar situation where
34:18
a laptop
34:20
that had the safe wallet
34:22
was actually compromised.
34:24
So again, it speaks volumes of
34:27
social engineering and compromised
34:29
devices, You know, rather than sort
34:31
of.
34:32
Software shortcomings that are the
34:34
issue here. But yeah, from your
34:35
side, how long did it take to
34:37
actually figure out what was going
34:38
on?
34:39
So for us to actually figure out the
34:41
full, to figure out that there
34:42
were compromised keys was
34:44
within a very short period of
34:46
time, right?
34:47
As soon as tokens start moving and
34:49
whoever was supposed to have control
34:51
over those devices,
34:54
we get hold of the individuals
34:56
and they're in shock and
34:58
we kind of know what happened.
35:00
To understand the full extent of
35:02
the situation actually took
35:04
a good couple of days,
35:06
right. So within.
35:08
I think within the first two hours
35:10
of the incident happening,
35:13
I called up an
35:15
old friend of mine, Richard,
35:17
who is the founder of Kwanstam.
35:20
So he immediately picked
35:22
up the phone.
35:23
The security team involved helped
35:25
out to figure out what's going on.
35:28
And then over the coming days
35:30
essentially we had to do forensics
35:32
on all the devices on our
35:34
network and
35:37
ultimately realized that
35:40
the intrusion was through
35:42
a phishing email,
35:46
which actually multiple people from
35:48
my team received except
35:51
that there wasn't.
35:52
Who clicked onto it,
35:55
and then as a result,
35:58
they were backed up keys that were.
36:02
Um, Obviously there were a lot
36:04
of people online that were crying
36:06
foul and I think as
36:08
a journalist it's never fair or
36:10
nice to see these
36:12
things going on. How did you deal
36:14
with that criticism?
36:17
I think a lot people were pointing
36:18
back to your history having run
36:20
Tink Labs and a
36:22
very successful business
36:24
that ended up winding down a
36:26
few years later and a lot of people
36:28
were saying if that happened in the
36:29
past it's
36:32
not a good look that this happened
36:33
again. Thanks.
36:34
Yeah, so I think it's
36:36
interesting, right?
36:38
And it's a pretty sad
36:40
experience.
36:42
And frankly, I would say it's
36:44
very disappointing experience.
36:48
I started my first company when I
36:50
was 19.
36:52
It grew to become one of the first
36:54
unicorns out of Asia.
36:57
And we were doing great.
36:59
Great is a decent chunk of money,
37:01
but we were also doing a lot of
37:03
revenues.
37:04
North of $100 million a year,
37:07
and then COVID and different sort
37:09
of situations caused troubles,
37:11
especially in the travel industry
37:13
that we were in.
37:14
And so that was my
37:16
first sort of failed entrepreneurial
37:18
experience.
37:19
That being said, I have kept
37:22
very much in good terms
37:24
with investors back then.
37:25
Friends, colleagues, colleagues
37:27
who actually still work with
37:29
me now who were working with me back
37:31
then, right?
37:32
So there's that degree of trust and
37:34
even I think within the startup
37:35
community
37:38
that failure I would say is
37:39
necessarily celebrated but
37:42
at the very least it's understood
37:44
and somewhat embraced.
37:48
I think it was a pretty
37:51
interesting experience to
37:52
see that in crypto
37:54
uh the amount of toxicity
37:56
that was there uh
37:58
just right away right um
38:01
i think obviously friends of mine
38:02
people who know me uh personally
38:05
uh
38:07
it was it was just kind words
38:09
how are you doing how can we
38:11
help etc etc um
38:13
but there are cases where it's even
38:15
like ko investors of ours
38:17
who are, you know, saying, you know,
38:19
like, this is the run.
38:22
Even though their TG
38:24
unlock allocation has already made
38:26
them, you know, five, 10 times their
38:27
investment, right?
38:29
And then you obviously have like
38:30
people on Twitter who are
38:31
simply saying that, you know this is
38:33
a rough, this is rough, this is an
38:34
inside job.
38:36
You have guys like Zach SBT who,
38:38
you know, just spills
38:39
out bullshit without understanding
38:41
anything within the
38:43
first minutes.
38:45
You know, I really appreciate the
38:47
stuff that he's done tracking
38:49
funds on chain and off, but like,
38:50
I think it's come to a situation
38:52
where the first assumption is, oh,
38:54
there must be foul play.
38:56
And then, you know, a couple
38:58
days ago, there was there was a
39:00
there was an article where he's
39:01
tracked down the commingling of
39:03
funds between our hack and the
39:05
kelp Dow sort of and
39:07
then he published something.
39:08
He sent me a message.
39:09
I said, yeah, I appreciate it.
39:11
But I think sort of that initial
39:14
reaction from a lot of people
39:16
actually
39:18
made me quite jaded about the
39:21
whole industry simply because
39:28
it's interesting to me that that was
39:30
the very first thing that people
39:31
assumed.
39:33
You know, the token.
39:35
Was doing very well.
39:37
Prior to that,
39:39
we were, you know, actually,
39:41
especially in markets like Korea,
39:43
where you know we were actually
39:45
trading, our trading volumes
39:47
were sometimes higher than Bitcoin,
39:49
where we have a very strong
39:50
community.
39:52
The team has been working on a lot
39:53
of different products, initiatives,
39:54
you know, we've been moving a lot
39:56
more into AI space and
39:58
building products for that.
40:00
And so
40:01
I think for
40:04
sort of the first
40:06
reason. Action to be,
40:08
oh, these guys decided to
40:10
go crash themselves and brought
40:11
themselves, seemed a little
40:13
bit insane.
40:16
But obviously,
40:18
there's people who
40:20
are willing to say and
40:22
believe whatever they want, right?
40:24
But it certainly has
40:26
made me feel a
40:29
little is sad about sort of the
40:30
state of the.
40:32
Yeah, definitely.
40:33
Look, I think your comment
40:35
about the report
40:37
that linked the
40:40
co-mingling of funds to
40:41
prior hacks kind of
40:44
puts all of those criticisms to bed.
40:46
If we can find irrefutable,
40:48
unchained evidence that suggests
40:50
that this is a group that
40:52
has carried out exploits on other
40:54
protocols, it's fair to see
40:55
that this actually the case.
40:58
Yeah, it's a sad reality of our
41:00
industry, Terrence.
41:01
So many people have been burned that
41:03
the first thing that they'll think
41:04
is that someone's disingenuous or
41:06
they've gone and rag-pulled
41:07
everyone. And I do agree with you
41:09
that that's unfortunate.
41:11
And unless you have receipts and
41:14
checks for all of these things,
41:15
it is not fair to be casting
41:17
aspersions or calling...
41:18
Or I think the other way to look
41:20
at it is that I think,
41:21
unfortunately, there's a lot of
41:23
disingenuous people and so if
41:25
something like this were to happen
41:26
to somebody else, my very first
41:28
reaction would be like, oh, this
41:30
is really sad.
41:31
How can I help?
41:33
Not how these
41:35
guys must have pretended
41:37
to do something,
41:39
right?
41:41
So, yeah, so I
41:43
think it is what it is.
41:45
And, you know, we've been trying
41:47
to work on.
41:48
Recovery and all sorts of stuff
41:50
dealing with law enforcement.
41:52
So it's just been pretty stressful.
41:56
Let's talk about the road forward.
41:57
I mean, how do you see
41:59
things playing out from here?
42:00
Can you give us a sense of what's
42:02
actually happening right now, what
42:04
the recovery plan is?
42:05
I believe you do have some plans
42:07
for a token migration and
42:09
perhaps some of the conversations
42:10
that you have been having with
42:12
law enforcement.
42:14
Anything that you can tell us to
42:16
give people
42:18
some sense of where things are going
42:20
from here.
42:22
Yeah, so, I mean, right now
42:24
we have, we've been
42:26
in touch with law enforcement in
42:28
many different, in multiple
42:29
jurisdictions, right?
42:30
You know, starting with Hong Kong,
42:32
because that's where the
42:34
advice and question was located.
42:36
And then, you know, the foundation,
42:39
the United Foundation has been in
42:40
contact with law enforcement in the
42:42
Indian Islands,
42:44
and then also me personally, I've
42:45
been in touch, with
42:48
law, enforcement in, in the U.S.
42:51
Right? So these are ongoing
42:53
processes.
42:54
I think the chance for actual fund
42:55
recovery is pretty low.
42:58
I mean, if the Biden guy's
43:01
got hacked for a billion and a half
43:03
and is
43:05
having a difficult time recovering
43:07
the billion and half, I think
43:09
for us, it's probably going to be
43:10
just as for.
43:12
Whereas I think
43:15
the intention
43:17
now is to focus
43:19
on building up.
43:22
The intention is to focus on,
43:24
you know,
43:27
our token migration,
43:29
which, you know, it's
43:31
sort of a work in progress and will
43:32
likely take quite a bit of time.
43:36
We've been working on that with
43:38
various exchanges and,
43:41
you know,
43:44
its on-chain users, exchanges,
43:46
and it'll just take some time for
43:47
all of us to get there.
43:58
Yeah, he's nowhere to
44:00
be seen.
44:06
I can hear you, but I can't see.
44:15
It's just a second nori.
45:01
Yeah, so I think
45:04
I think I'll answer those two
45:06
questions separately, correct?
45:08
So first thing, in terms of what
45:09
humanity is looking on, we were
45:10
working on our own blockchain
45:12
for data and identity.
45:14
We essentially built a
45:16
credentialing blockchain where
45:18
starting with personhood, verifying
45:20
how you're a person, all the
45:22
way into various types of
45:24
credentials.
45:25
You know, proof of employment,
45:26
working with MasterCard on proof of
45:28
assets, credit scores,
45:30
proving what your role to program
45:31
and status is, all
45:33
sorts of different things, and
45:35
running back through zero-knowledge
45:37
proofs so people can choose who
45:39
they want to share that data with
45:41
without necessarily revealing
45:43
any sort of personal information.
45:45
And, you know, we've
45:47
signed up around 10 million people,
45:50
a couple million people have
45:51
completed a variety of different
45:53
credentials, and we're starting to
45:54
work with different partners
45:56
on using Humanity
45:58
Protocol for whether it's
46:00
for sort of an elite
46:02
on-chain KYC or
46:04
different types of credentialing.
46:06
Maybe it's from our game, maybe it's
46:08
with discounts, different sort of...
46:10
Right.
46:12
I think what is really interesting
46:14
is that over the last
46:16
couple months,
46:19
over last probably six, six to nine
46:21
months.
46:22
The team has been actually quietly
46:24
pivoting a little bit, including
46:26
sort of myself, where we've
46:28
been thinking through, okay, what's
46:30
the use for identity?
46:32
Why is it important to verify
46:33
people, especially
46:35
in the age of AI?
46:37
And what we're actually realizing is
46:39
that in this current
46:41
world of AI,
46:43
it's only gonna be more important.
46:45
So something like humanity we're
46:47
very bullish about.
46:48
But more importantly, I think
46:50
the team has been exploring and
46:52
experimenting with different sort of
46:54
products, different sort of things
46:56
that we actually want to launch into
46:57
the market
46:59
for the,
47:01
you know, specifically for different
47:03
types of companies, enterprises,
47:06
in the AI space.
47:08
You know, that funny enough
47:10
has sort of been the focus
47:12
for me and the team
47:14
for the last couple of months.
47:17
And so, you know, I think
47:19
Kind of in line with
47:21
the hack,
47:23
we probably, moving forward,
47:26
would want to reposition ourselves
47:28
less as
47:31
a blockchain company or less
47:33
as an identity or
47:35
decentralized IT project.
47:37
But moving forward I think there's
47:40
a lot more products
47:42
and services that we're going to be
47:43
launching tied
47:45
to the enterprise AI space.
47:48
Um, but I think that's, that's
47:49
probably for, uh, for next
47:51
conversation.
47:52
Um, in terms of
47:54
token and recovery and whatnot,
47:56
as I mentioned, uh.
47:59
It's going to, it's going take some
48:00
time, uh simply because
48:03
we have to track and figure
48:05
out all the transactions that's
48:06
happened post hack.
48:07
Uh, we've done sort of
48:09
on the, on the foundation side, what
48:11
they've done is sort of created a
48:14
claims and recovery portal.
48:18
So the new
48:20
token has
48:22
been issued,
48:25
it's been airdropped
48:28
to a range of
48:29
addresses including some of
48:31
the major exchanges.
48:33
There are conversations that are
48:34
still being held with other
48:36
exchanges because of different
48:38
snapshot times, different times of
48:40
halting deposits, withdrawals,
48:42
the pretty pools of our contracts,
48:45
custodians.
48:46
Um you know different sort
48:48
of partners where there's still
48:49
ongoing conversations on
48:51
how uh how the recovery
48:53
and how the resource
48:55
uh compensation should work
48:58
um so it's it's just
49:00
a it's all just a
49:02
work in progress at this moment
49:04
and uh yeah
49:09
Okay, we can't hear you.
49:15
The physical mute on my camera.
49:17
We really appreciate you taking
49:19
the time to come and chat to us,
49:20
Terrence. I know it's obviously been
49:22
a very difficult couple of weeks and
49:24
it's not the first time that I've
49:25
spoken to founders that have been
49:27
sort of really in the trenches
49:28
dealing with these kinds of
49:30
exploits.
49:31
And I think a little bit more
49:32
humility from everyone
49:35
goes a long way, especially when
49:37
people are still just trying to
49:38
figure out what actually happened
49:39
and the best way to go forward.
49:42
For people out there that are
49:43
looking for more updates, more
49:44
information.
49:46
Can you point us in the right
49:47
direction, whether that's, you know,
49:49
Humanity Protocol on X or your own X
49:51
account or your website?
49:54
To be frank, I think humanity
49:55
protocol on X is probably in the
49:57
best place.
49:58
My Twitter is,
50:00
generally, I'm not the most
50:03
active on it,
50:06
kind of more so as a result of
50:08
recent situation also.
50:10
I do think there's quite a fair bit
50:12
of plasticity.
50:14
And then I think even personally
50:15
myself, instead
50:18
of being very focused necessarily
50:19
as a, you know, watching evangelist.
50:22
Uh sort of tight persona that
50:24
obviously is is is
50:26
part of the job um
50:28
you know what i actually also
50:30
realized over the last couple months
50:31
is is really enjoying now
50:33
with like clock code and
50:35
you know codex and all of that stuff
50:37
just building again um
50:40
and so i think
50:42
Part of the recovery is
50:44
having various people in the team
50:46
and the foundation working through
50:50
the token,
50:54
but then also partly it's like
50:55
figuring out where everything that
50:58
may be on different products
51:00
and VAX-based services
51:02
that ultimately tie back
51:04
to us.
51:06
Yep Okay, well, people
51:08
out there looking for more
51:09
information, it's at HumanityProt
51:12
on X, where you can find
51:13
any updates from the team.
51:16
Terrence, once again, thank you.
51:17
Thank you very much for chatting to
51:18
us.
51:19
Support to you and the team,
51:20
hopefully there's a
51:23
silver lining here and the roadmap
51:25
ahead does sort of
51:27
come to fruition.
51:28
But again, thank you so much for
51:30
taking the time to chat to us today.
51:33
Yeah, thank very much to
51:35
the audience for coming and joining
51:36
us here.
51:37
For the starting block.
51:38
This was actually our first virtual
51:39
show. We launched the show this week
51:41
on Monday with a special
51:43
interview with CZ Wright
51:46
in Abu Dhabi in his backyard.
51:47
If you want to go and re-watch that
51:49
interview, you can find it at the
51:50
top of the block's X
51:52
timeline. That's at the block co.
51:55
It's pinned right at the bottom of
51:56
our timeline. So if you want go and
51:57
listen to that interview with Cz,
51:59
full of great insights.
52:01
And we will have a full,
52:03
completely edited video up on our
52:04
YouTube channel in the next couple
52:06
of days time as well.
52:08
If it's your first time hearing
52:09
about the starting block, this is
52:10
the block's new daily show.
52:13
We will be broadcasting every day at
52:15
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52:17
It's 2.30 Central European time.
52:19
So morning time in the U.S.
52:21
Just before the opening
52:22
bowl of the markets.
52:24
And of course, in the afternoon
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right here in Europe where you can
52:26
catch up on the top headlines of the
52:28
day and hear from big
52:30
newsmakers.
52:31
We'll be back tomorrow afternoon
52:33
with another version of the show.
52:35
We're gonna have Yatsu from Animoca
52:37
Brands to chat to us.
52:38
And we'll also have Michiel from the
52:40
POP to do market polls with
52:42
us as well.
52:43
So, looking forward to having you
52:44
back tomorrow.
52:45
Once again, if you're not already,
52:46
please follow The Block on X, that's
52:48
at The Block Co.
52:50
If you enjoyed this broadcast and
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the show, please like and retweet
52:53
it. And of course, set a reminder
52:55
on your calendars every day, we'll
52:56
be broadcasting live.
52:58
We've got the top news in the
52:59
industry. We've got the best markets
53:01
updates in the industry and we've
53:03
got to best interviews in the
53:04
industries. So it's a great pleasure
53:05
to have you here with us today and
53:07
we look forward to you joining us
53:09
next time. Until tomorrow, have a
53:11
fantastic morning and afternoon
53:13
wherever you are, bye bye.