Kinto Drops 81% After Announcing Shutdown of ETH Layer-2 Months After Hack
Kinto Token Drops 80% After Network Shutdown Announcement
The Kinto token (K) has crashed more than 80% after the team announced that its Ethereum layer-2 blockchain, Kinto Network, will shut down at the end of September.
The project had been struggling for months. In July, a hack drained about 577 ETH (~$1.6 million) from its platform. To keep things alive, Kinto borrowed $1 million to restore trading, but the weak market made it impossible to raise more funds.
On Sunday, Kinto said on Medium:
“We’ve run out of options. We’ve worked without salaries since July, and with no more financing available, the only responsible decision is to shut down and protect users and lenders as much as possible.”
What Happened?
- The hack was caused by a security issue in the ERC-1967 Proxy standard, which also affected other crypto projects.
- Kinto also offered very high yields — at one point 130% APY on USDC staking — which some say was unsustainable.
- The platform let users trade tokenized stocks like Apple, Microsoft, and Nvidia, aiming to mix the speed of centralized exchanges with the safety of decentralized ones.
Recovery Plan
- Kinto will distribute all remaining assets, including $800,000 in Uniswap liquidity, to the lenders (“Phoenix lenders”) who helped during the relaunch. They are expected to get back about 76% of their loans.
- Victims of the hack will also receive a $1,100 goodwill grant per affected address. One of Kinto’s founders, Ramon Recuero, will personally add over $130,000 to help.
- Users are urged to withdraw their assets before September 30. After that, they can claim through a special contract Kinto will set up.
Not the First Failure
This is the second failed crypto project for Recuero. His earlier project, Babylon Finance, also shut down in 2022 after a $3.4 million hack.
Token Price Collapse
Since the shutdown news, Kinto (K) has fallen 81% to $0.46, leaving its market cap just above $1 million. This comes less than a month after hitting a peak of $14.5 million in August. The token only launched in April 2025.
