The governance token of Kinto Network (K) has plummeted by more than 80% after the team revealed plans to wind down its Ethereum layer-2 blockchain by the end of September. The move follows months of financial strain and an industry-wide hack that crippled operations.
1/ 🛑 Kinto is shutting down.
After exhausting every path to keep going, we’re conducting orderly wind-down to protect users and community.
– Users can normally withdraw assets
– Phoenix lenders receive ~76%
– Morpho Victims can claim up to $1.1k eachRead full details 🧵
— Kinto (@KintoXYZ) September 7, 2025
$1.6M hack and failed fundraising push
In July, Kinto’s modular exchange was attacked by a vulnerability in the ERC-1967 Proxy standard, leading to the theft of 577 ETH (about $1.6 million). While the team raised $1 million in debt financing to restore trading, worsening market conditions ultimately stalled further fundraising efforts. Kinto admitted that it had been operating without salaries since July, leaving a shutdown as the only “responsible choice.”
Some observers argue that Kinto’s downfall was also tied to its unsustainable returns. Earlier this year, co-founder Ramon Recuero disclosed that Kinto’s staking offered an eye-watering 130% APY in USDC, among the highest in decentralized finance. Critics say these yields strained the project, especially after the hack.
Related: Altura to Shut Down Stablecoin Yield Vault After Surge in Withdrawals
Recovery plan for lenders and victims
Despite shutting down, Kinto has pledged to distribute all remaining assets, including $800,000 in Uniswap liquidity, to “Phoenix” lenders who supported its relaunch. They are expected to recover around 76% of their principal.
The team also announced a goodwill grant for hack victims, with Recuero personally contributing $130,000 to provide $1,100 per affected wallet. Any further recovered funds will be shared with the community via Snapshot votes.
Second failure for founder Ramon Recuero
The collapse of Kinto marks Recuero’s second major setback. His earlier project, Babylon Finance, also shut down in 2022 after a $3.4 million hack. Kinto’s native token (K) has plunged 81.4% to $0.46 according to CoinGecko data, leaving its market cap just above $1 million, a sharp fall from its $14.5 million peak less than a month ago.
Meanwhile, earlier this year, MEXC announced the upcoming listing of Kinto accompanied by a series of promotional events with a combined prize pool of 12,800 K and 50,000 USDT.
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