Kinto Token Plunges 81% as Ethereum L2 Announces Shutdown

- Kinto confirmed its closure for September 30, 2025, citing financial collapse and a $1.6 million security breach. - The platform’s recovery plan earmarks $800,000 for lenders and provides goodwill grants for hack victims. Kinto, an Ethereum layer-2 solution, will shut down all operations on September 30, 2025. The company faces severe financial struggles after a damaging $1.6 million hack in July. On September 8, 2025, Cointelegraph reported that the exploit targeted vulnerabilities in the ERC-1967 Proxy standard, which impacted several projects across the blockchain. In addition to the hack, deteriorating market conditions and failed fundraising initiatives led Kinto to shut down, despite its efforts to stabilize. In July 2025, the company attempted to resolve its financial crisis by raising $1 million in debt and implementing high staking yields to attract investment. However, these strategies failed to overcome market volatility, which hampered further fundraising opportunities. The team reportedly worked without pay since July to sustain operations, but mounting pressures still caused Kinto's governance token, K, to lose 81% of its value. Following the shutdown announcement, Kinto revealed its recovery plan to reimburse affected stakeholders. The company has earmarked around $800,000 in assets, including Uniswap liquidity, for lenders from the relaunch initiative, providing a 76% recovery of their principal investments. To further mitigate losses, Kinto will also provide a "goodwill grant" of $1,100 to each address impacted by the July hack. Kinto’s founder, Ramon Recuero, has personally committed over $130,000 to support this grant. This marks Recuero’s second failed crypto venture, as his previous company, Babylon Finance, collapsed in November 2022 after a similar hack forced it to shut down. According to CoinMarketCap, Ethereum (ETH) was priced at $4,309.77 as of 03:09 UTC on September 8. This reflects a 0.29% change in the last 24 hours. Meanwhile, competing layer-2 solution Arbitrum (ARB) traded at $0.49, reporting a 0.57% increase during the same period.