This is a message to the community from Affinity Shard, a representative of the Recovery Multisig Custodians (RMC) regarding recovery.
Hello everyone,
I will try to keep this as short as possible but it won’t be very short in any way as a lot has happened recently involving the recovery process and its partners. I want to start by apologizing for any trouble this has caused anyone. Our intentions as RMC members have always been to simply facilitate the transfer of recovery funds to our recovery partners and until recently we have done this for the most part every month without fail and haven’t asked too many questions or looked too deeply into things as this was not our assigned role. We were however pushed into the need to make decisions several times over the course of our time in RMC, and I will explain everything that I am able in this post, you just have to bear with me through it all and I thank you in advance for that.
I’m sorry that we are even here doing this but due to Recovery1’s recent posts, polls and other unwarranted accusations, as well as the community outcry for us to speak out about what is going on instead of staying silent, I felt it was necessary to provide the full truth, with all context instead of what Recovery1 is doing and posting things with zero context as to what is actually going on. I feel it is necessary to tell you everything and let you the community decide for yourself how you feel about it all.
This leads us to the recent events which have taken place involving the recovery process, the RMC and Recovery1, but first I will attempt to provide a little information and history.
Recovery Multisig Address:
Snapshot for vote on HIP30v2 (25% emissions split for recovery):
https://snapshot.box/#/s:harmony-mainnet.eth/proposal/0xce5f516c683170e4164a06e42dcd487681f46f42606b639955eb7c0fa3b13b96
Original Harmony Post HIP30v2:
Recovery Multisig Custodian (RMC) Nominations (Term 1):
Original RMC members at creation (Term 1):
PeaceLoveHarmony
Nick V | Staking Club
Buttheadus (Tenacious Defi)
TEC Viva
Tr4cker
Hank the Crank
Affinity Shard
RMC Nominations (Term 2 Current)
Current RMC members (Term 2):
PeaceLoveHarmony
Nick V | Staking Club
Tenacious Defi
TEC Viva
Affinity Shard
Crypto Tech
MetaONE KLAS
RMC Term 1 started November 2023 and ended in December 2024, All decisions prior to this were made by Term 1 and all decisions after this were made by Term 2 members.
Recovery1 members:
Matthew Barrett
Crypto Quoc
Hound Validator (Hound replaced Pioneer who left the team some time ago due to accusations on both sides about wrongdoing of some sort)
RMC volunteers their services but term 1 did receive the LayerZero airdrop offered to them by the Harmony team in June 2024 unrelated to the recovery funds from staking emissions. Term 2 RMC has received zero compensation in any form. Recovery1 is paid monthly at $3K per month, $1K monthly per member from the recovery funds for a total of 20 months so far, this month July 2025 would mark the 21st month. No other burn partner, RMC member, Ambassador or otherwise other than Recovery1 has ever been paid for the recovery process.
The constant claims by Recovery1 of 33 consecutive months of recovery is false, it is actually 20 months and only consecutive for Recovery1 as they did not have an issue with us making changes back then and sending them 100% of the funds for months now and Modulo getting nothing each month as stated below.
On August 22, 2024, RMC Term 1 had been notified by Theo P. that we were to send 1 Million $ONE to Colossus as a bug bounty concerning the bug discovered by Colossus and Modulo pertaining to the minting of $ONE. Modulo did not require a bounty but we were notified that Stephen Tse wished for RMC to cover the cost of the bounty to Colossus. After much deliberation and back and forth, RMC Term 1 decided to push back and rejected the bounty out of the recovery funds. Instead we told Harmony team they needed to cover the bounty themselves or in some other way otherwise it needed a community vote to deviate the funds for another use. Harmony ended up covering the bounty in the end and RMC was never made to deviate from our operations, which shows our dedication to the community and the recovery process as well as another instance of a need for the RMC to make critical decisions outside our normal scope as you will see more of throughout this text.
The story about Pioneer and Recovery1 as I remember it(for context to the above note):
I provide this story to you simply for reference of the honest facts and am in no way implying foul play on anyone’s part, I just want honesty and transparency to be at the forefront of this entire conversation so that the community has the full context of everything and everyone involved from a community member and validators perspective.
When the hack happened the community and validators were coming up with tons of great ideas for solutions, but Stephen Tse didn’t really want to hear any of them. In the end he kept pushing to go with these guys who had a great idea. Their names were Matthew Barrett and Crypto Quoc and they had an entire resume on why they were qualified in his eyes to do the job.
Where did they come from you ask? They were “community members” who were users of Harmony, Matthew Barrett in finance and Crypto Quoc a developer. They had never been involved before, posted anything or spoken in our talks, but for recovery here they were. Trust, not an issue for Tse, he trusted them completely, but the rest of us, nope he thought we didn’t know how to fix things so he chose them and their idea as one of the main recovery partners when there were plenty of other good ideas floating around in the forums by many other users.
In order to obtain the support of the community they picked up one of our actual trusted community members and developers, Pioneer. We knew his face, we knew his skills, we trusted him to some degree and with him involved we thought this isn’t such a terrible thing now. In order to obtain his and their services, they all agreed on $1000 per month pay for each of them, even though every other position involved would be voluntary.
Pioneer had been a member of Harmoforce with me and many other Harmony community members and was involved in other projects on Harmony so we had gotten to know him well over time. He started having private talks with us about how he wasn’t happy with things going on in the recovery group. We didn’t think much of it at first but over time things got worse and he got angry. He quit the Recovery group, leaving behind an easy $1000 per month for hardly any work other than that he was in charge of communications with the community as it was what he was great at doing.
His reasoning you ask, why would he leave behind free money? He screamed foul play, and that there was something nefarious going on behind the scenes that he just couldn’t quite pinpoint that I know of but he didn’t want to be involved. So he quit the group.
Their response? Their response was to in turn, accuse him of the very thing he had just quit and accused them of doing. They accused him of foul play with the funds or something similar. The argument went back and forth on social media for a while but ended up leading nowhere before Pioneer eventually left Harmony and the talks and everything was just forgotten over time.
Recovery 1 hired Hound for the $1000 pay in Pioneers place. Now lets talk about Hound. I don’t know too much about him but I do know he has invested some time into being a validator and volunteering for things in the past. He had at one point started his own token on Harmony called $Hound. He offered the idea that he was already involved in real estate and would give returns from that to the token holders. So I bought in on some. Months, maybe a year went by and nothing at all happened, except that I noticed he pulled all liquidity from swap.harmony.one and rug pulled the holders completely. I complained to him and he privately made it right for me by sending me the quantity in $ONE of my original purchase, but the other holders? I’m not sure. Was this intentional fraud? No probably not, but negligent and irresponsible? Yes! I would say my trust in him was diminished long ago, just like the other 2 appearing out of thin air with Stephens trust when the rest of us didn’t know them at all. Though these things were in the back of my mind, I set my personal opinions and lack of trust in them aside for the greater good of the community and continued recovery without issue, until something came up that warranted further review.
Now on to the details of the situation at hand:
Originally when the recovery process was first created between July and November 2023 there were 3 burn partners total as far as I’m aware, which were Recovery1, Tranquil and Modulo. RMC Multisig has only ever sent to 2 partners as Tranquil was never an RMC burn partner. Our first transaction took place on November 14, 2023 and we sent equal funds to Recovery1 and Modulo, which stopped the following month in December 2023 when RMC were notified of a Harmony bug found and exploited by Aaron, the creator of Modulo. He was able to somehow use an exploit to mint $ONE into existence and was then accused by Caseyga.eth (Ex Harmony team member) of attempting to get away with selling these minted funds on an exchange. Aaron of Modulo however stated that he did the right thing, burned it and notified Harmony team and stopped it from further damaging Harmony and the ecosystem. Theo P. of Harmony team spoke with the RMC members and together we determined it best to hold off payment to Modulo until we figured out what was going on. So on December 22, 2023 we sent full funds for that month to Recovery1 and none to Modulo. All of this can be seen on chain in the multisig address provided.
By the next month we had determined everything had been settled and that it seemed Aaron of Modulo was cleared of wrongdoing and was able to continue as a recovery partner for months until April 2024 when we noticed Modulo was not burning all of their funds each month and was building up funds over time. This was due to their recovery mechanics relying on $ONE price appreciation and that at the time was just not happening so the funds were being accumulated and unused. This is when we decided, in an attempt to keep recovery flowing, to start funding Modulo a lower % and fund Recovery1 more each month. Over time Modulo was still not performing as intended originally and the funds were accumulating each month. We decided in October 2024 to fund Recovery1 group 100% and Modulo nothing as it was not exchanging funds and had no need to receive more. On October 11, 2024 and every month since then we have funded Recovery1 100% of monthly funds all the way until the last monthly payment they received on June 17, 2025.
After sending the May 2025 funds to Recovery1 it was brought to our attention on May 17, 2025 that RMC sent over about 160K in $ONE that month and Recovery.exchange received 135K in funds. After some deliberation on the issue we were informed this had been happening consistently for months or possibly longer which was not known to us prior to this. Price fluctuations happen as well as transaction fees so it is expected for it to be up or down some from the original $ONE sent, but to be consistently down each month, we believe deserved some questioning at the very least.
We spoke with Theo P. of the Harmony team about this and determined it would be best to request proof of transactions from Recovery1 team for the latest funds sent in May. We requested the information and they did, after several days respond with some basic information in a spreadsheet laying out each of the $ONE sales spread out into multiple sells. To my knowledge not much other information or transaction hashes were provided. We looked over the information provided as thoroughly as possible but as none of us are experts in understanding exactly what we were looking at while at the same time not having access to all data needed, we were not able to definitively determine that we were satisfied with what was provided. We in no way were accusing them of anything, but at the same time, we did not have everything needed to be satisfied that it was transparent enough to trust and understand where the lost funds were going. We were informed by Theo P. that there are no reporting requirement so we could not force them to provide more information at the current time without making changes.
Since May we have been working together and with Theo P. to try to find a solution to all of this but it hasn’t been a fast or easy process. On May 21, 2025 is the first time Tenacious Defi and MetaONE KLAS, members of RMC and Crypto Land DAO, offered the idea to write up a possible recovery solution to add another partner while we were waiting on answers from Recovery1 about where the funds were going each month. Over the next couple weeks into early June 2025 we were discussing possible options including speaking with Theo P. from Harmony team who helped us come up with some ideas for future recovery plans. With Snapshot no longer working for voting we had to talk about voting as well, how and where we would vote and we needed to come up with a plan to present to the community for voting, once voting is fixed.
On June 12, 2025 Theo P. notified us that if we got a proposal up they would push to get snapshot fixed or a fork created quickly so that we could have the community vote. Theo P. also suggested on June 12 2025 that we try to set up RMC as a paid position in future proposals for recovery, which I don’t believe we’ve ever really spoken about since then because we made it very clear that being paid was not something we were seeking at all and that there were much bigger objectives to tackle than that. I’m proud of all of the RMC members for never asking for pay and always showing their dedication and support to Harmony and the recovery process through their volunteer work. You have all been amazing, thank you for your time and efforts to protect users and get recovery completed in the best way possible.
On June 16, 2025 MetaONE KLAS notified us that their proposal was ready and Theo P. reminded them that a partner cannot be an RMC member as it is a conflict of interest and they(CLD - Tenacious and MetaONE) agreed that they know and are willing to step down if they get approved by the community as a partner after voting.
On June 17, 2025 after much back and forth on what to do and whether or not to keep waiting for a solution to be posted, we were now 1 week after the monthly initiation date of sending funds to Recovery1 with no clear solution in place for either voting or a temporary fix yet, so we voted to send funds one more time without making changes, so the last couple signers signed off and the funds were sent. TenaciousDefi made it clear to Theo P. that it would be his last time signing until they get some sort of solution to the original issue, which was a discrepancy in the funding of Recovery1 and our desire to know more before continuing to send them all the funds as our only recovery partner.
Then on June 19, 2025 Recovery1 made a Rogue move breaking protocol saying:
“Due to the RMC delay and shortened burn period, R1 accelerated the burning of depegged assets by allocating 20% of monthly funds to buy depegged assets on-chain. Acquired tokens were sent to the R1 multisig for burning.”
https://x.com/recoveryonefdn/status/1935550291740405988?t=qL6nzKggQFu2Ea6wy74C9A&s=19
Please keep in mind that the funds were sent on June 17, 2025 and the previous months funds were sent on May 14, 2025, just 3 days earlier the month before, so how 3 days on a multisignature sending of funds is a big delay is beyond my understanding, as it could take days sometimes for all signers to sign a transaction, and we are all volunteers after all. They decided to just burn 20% of all funds themselves rather than make full funds available for the community. This only made things worse for confidence of Recovery1 within RMC group.
Buyback & Burn Details:
Depegged USDC Burn Transaction:
0x7cd19ce4c8faa146f928680b5c70dae743c6b5025c83711012a6b4d8356ebe00
Depegged USDT Burn Transaction:
0x5ff7dc714a168384209ff4f38a0d63f7e7bbea0b6928739e6c087514ec8bcb35
On June 23, 2025 we were notified by Theo P. that Yuriy is tasked with the development of SnapshotX, a fork of snapshot, so that we will be able to vote again when it is complete. This is promising but will take some time to get completed.
Since then we have been working together with Theo P. to try and formulate a plan on how to move forward with recovery without voting. As it stands we do not have the ability to use snapshot for voting the way we always have in the past due to changes with snapshot and are waiting on the development of snapshotx from Harmony team.
On July 10, 2025 we got an update that snapshotX was in testing and voting strategies were being tested so progress was being made but no eta yet. As far as the July 2025 monthly RMC funds to be sent to Recovery1, it was made clear by TenaciousDefi and others immediately upon sending funds in June, that they would not facilitate another transaction in July without something solid to work with as an agreement from Harmony team or until Harmony team quickly got voting fixed. Since June as stated, we have worked together to come up with a temporary solution and ideas for more permanent solutions.
On July 16, 2025 Theo P. notified us that Recovery1 was working on a new proposal draft for themselves and that he was working on a draft as well for the use of the old 200M validator initiative funds left over and sitting idle to be used to possibly complete recovery, which is 260M $ONE currently but would need approved for use. With both of these proposals, as well as the proposals from the other possible future burn partners, we knew we now have the proposals for when voting is fixed, but for now we know something needs done in the meantime.
As for a solution for the time being, to keep thing moving and not halt recovery longer, Harmony team will be posting updated terms for recovery partners which is our requirement moving forward to keep recovery moving until voting is fixed. I hope that these requirement alone make clear our intentions as members of the RMC and why we did what we did leading up to all of this being posted for the community. We are here to send funds each month, yes, but we also felt like the only standing barrier and defense against any possible current or even future issues related to lack of transparency and use of community funds for recovery.
This is what leads us to now as I’m writing this, July 23, 2025, we are 2 weeks past the July transaction initiation date, and a little over 1 week past when we usually have the transaction completed and sent to Recovery1. Anyone who thinks we are extremely late is simply due to the aggressive tactics used recently by Recovery1 to strong arm us into sending them the funds over. They have used every tactic possible recently to try to paint RMC in a negative light and point us out as rogue and breaking the rules and not following the HIP. None of this is true and the story runs extremely deep compared to the way they have presented it.
To anyone who didn’t notice already, just look at Recovery1’s socials since they stopped receiving funding, their posts and messages have increased drastically and Quoc has likely posted for the first time publicly in years when he posted his story of recovery. On top of that their aggressive demands for funding as well as their aggressive dishonest tactics in community outreach on the subject have together shown a clear intent to seek out funding and pay, even if they have to set aside honesty and integrity in the process and I will demonstrate exactly why I believe this to be true.
If you look at their messages in the Community Telegram, Recovery Telegram or their X posts recently you will notice a lot of negative comments towards RMC and our operations, as well as the fact that we haven’t funded them yet. All the while we were in communication with them and Harmony team, working towards a solution, but that wasn’t good enough for them so they fought even harder in the public eye for the funding.
On July 17, 2025 Recovery1 posted a poll in the Harmony Community Telegram asking users:
”Do you support the RMC stopping recovery operations in July 2025, after 33 consecutive months of recovery?” You would think this is a one time mistake, but no, they have consistently claimed 33 or 34 months of recovery recently in posts all over. That is just the beginning but it is a mistake made consistently none the less.
The poll itself is extremely vague and leaves out all of the context I provided to you today, stating simply and implying that “RMC wishes to permanently stop recovery in July 2025 after 33 months of recovery”. Of course as you can see this is in no way true, but their intentions in the poll weren’t to get everyone to know the truth about what was going on, their goal was to get you to vote NO so that they could get their funding by presenting this poll to us and to Harmony team. The best way to get you to vote no is to provide zero context to what was going on and just imply that RMC have gone rogue and need to be put in check and made to not stop recovery permanently.
They could have provided context to what was going on, asked us to join in a talk with the community about the subject, or simply waited for further guidance on what was going on from the Harmony team, but instead they started a negative pressure campaign against RMC group to strong arm their funding, as they receive $1000 each per month as pay when we send funds to them.
That leads me to the next subject, where RMC has now found that the payments that Recovery1 has decided to collect this entire time, while no other partners or people involved receive funding, is nowhere in the HIP, in any documentation or anywhere that we could find that the community voted to pay Recovery1. It looks like they just decided to take the funding from the start as a fee for being a recovery partner. Li Jiang of Harmony team has recently confirmed that Harmony team offered them a one time grant for the work but did not approve reoccurring monthly funding, though he did say that the team had no oversight on Recovery1 internal decisions. Nowhere in the HIP does it say anything about funding for the recovery partners that we could find. Somehow this detail slipped past everyone when setting up the recovery process and I guess we all just assumed it was voted on somewhere.
Due to the above fact about the payments to Recovery1 not being voted on by the community or validators, we are formally requesting that Recovery1 group, immediately stop any and all future payments to yourselves when receiving recovery funds. If you wish to receive these payments for services rendered, you are welcome to put up a proposal along side everyone else and have the community vote on it. Thank you for your cooperation in this matter. We do appreciate your time as our only remaining recovery partner at the moment, and we hope that you kindly accept all previous payments as enough to satisfy your obligations to the current recovery plan.
I personally would like to request an apology from you, Recovery1, for your actions against RMC and your lack of accurate information, as well as your lack of patience and understanding in this situation, causing you to go on a pressure campaign against us and post false and misleading questions and comments which lacked enough detail for any person to be expected to make a reasonable decision in the matter, causing panic and chaos within the community that you claim to protect.
Thank you everyone for your time,
Affinity Shard
Update:
Here is the link to the terms above involving recovery partner integrity moving forward, posted by Theo P. of the Harmony team.