Kinto Token Plunges 81% After $1.6 Million Hack Forces Shutdown

- Kinto will shut down on September 30, 2025, following a $1.6 million hack. - Efforts to raise additional funding fell short amid worsening market conditions. On September 8, 2025, Cointelegraph reported that Kinto, an Ethereum Layer-2 blockchain, will cease operations on September 30. The shutdown follows a $1.6 million hack in July and a subsequent failure to secure further funding. As a result of this financial strain, the Kinto (K) token lost over 81% of its value, underscoring the severity of the crisis. The July hack exploited a security vulnerability, draining approximately $1.6 million worth of Ether. In an attempt to recover, Kinto raised $1 million in debt to restart trading and stabilize operations. However, deteriorating market conditions thwarted the company's financial recovery efforts, leading the team to announce the platform’s impending shutdown. As part of its wind-down plan, Kinto proposed a recovery strategy to compensate stakeholders. The company will allocate its remaining assets, including roughly $800,000 in Uniswap liquidity, to "Phoenix" lenders who supported the project after the hack. These lenders are expected to recover approximately 76% of their principal loan amounts. In addition, Kinto will create a "goodwill grant" for hack victims, offering $1,100 per impacted address, and the company's founder, Ramon Recuero, contributed more than $130,000 to this relief fund. Kinto advised users to withdraw their assets before the September 30 deadline. This shutdown marks the second failed venture for Recuero, as his previous project, Babylon Finance, also shut down in November 2022 following a $3.4 million hack. These repeated incidents highlight the ongoing security and financial challenges within the decentralized finance (DeFi) sector. According to CoinMarketCap on September 8, the alternative Ethereum Layer-2 solution Arbitrum (ARB) was trading at $0.499 as of 04:08 UTC, reflecting a 0.588% change in its 24-hour trading volume.