Kinto, an Ethereum Layer-2 venture, will shut down this month after experiencing a big exploit within the type of a $1.9M hack in July. The reported hack positioned the venture in a essential situation and drained all of its reserve fund, which presently places them able the place they can’t safe new funding. The official X (beforehand Twitter) account of Kinto confirmed the information yesterday. It publicly introduced that they have been shutting down after exhausting each path to maintain going and that they have been conducting an orderly wind-down to guard customers and the group.  

Based on Kinto’s official X submit, the Phoenix lenders will get better round 76% of funds, and the victims who suffered the hack are eligible for $1,100 goodwill grants as a comfort.

Customers can usually withdraw property, and the window will open till September 30. An Ethereum declare contract and ERA airdrop are additionally scheduled for subsequent month.

The latest announcement from the venture officers has sparked unprecedented market volatility that led to the native Ok token sliding 85% within the earlier 24 hours, and in line with the most recent statistics, the token is now 94% down in comparison with the final month.  

The Kinto Token has considerably plummeted after the crew introduced the shutdown

The Kinto token, the native and governance token of the Kinto Community, an Ethereum Layer 2 (L2) blockchain and a modular change, has slid over 85% after the officers revealed the venture shutdown. This information from the venture authorities has created panic among the many customers and triggered a dramatic sell-off within the cryptocurrency market.

Kinto was uncovered to a wise contract exploit that allowed an nameless hacker to mint 110,000 pretend Kinto tokens on the venture’s Arbitrum-based Ethereum Layer 2 and throw them out to the market on July 10. The nameless hacker reportedly siphoned round $1.55 million from lending swimming pools on Morpho and a Uniswap v4 vault. 

The safety researchers had identified the failings earlier, however the DeFi platform did not act in time, and it in the end led to this safety breach and hack. After per week, Kinto launched a comeback initiative known as Phoenix to boost $1 million to reboot buying and selling, and a brand new $KINTO token was additionally launched to revive stability for customers.  

The decaying market situations and unfavourable impacts ended the probabilities of additional fundraising and compelled the venture to finish all of its companies with speedy impact.

The newest data means that the venture will cease all of its operations from September 30, and customers can withdraw their funds throughout this time interval.

Kinto wrote on Medium that each day that they went on, the funds dwindled additional. That they had operated with out salaries since July, and after the final financing path had fallen by means of, they’d one accountable alternative left: to close down cleanly and shield customers/lenders as greatest as doable.

That they had eliminated all foundation-controlled liquidity from Uniswap to stop disorderly markets and shield the remaining treasury. That they had contacted CEXs and MMs to halt buying and selling and start their offboarding processes. 

The value of Kinto fell to 81.4% to $0.46 because the venture authorities formally confirmed the information. The autumn of Ok token comes after a month of practically reaching its all-time excessive worth of $14.5 million. The expansion and fall of Kinto was monumental, the token reaching an all-time excessive simply after 4 months of launch.

In April 2025, the token was launched into the market, and on August 14, it reached an all-time excessive of $14.5 million. In the intervening time, the token is buying and selling at $0.3965 and displaying bearish momentum out there. 

Particulars relating to the Funds   

Kinto acknowledged that 100% of the remaining property have been devoted to repaying Phoenix lenders, who had taken actual dangers to assist them relaunch. They might obtain 76% of the principal again. To reiterate, the crew and buyers had by no means unlocked any Kinto tokens, and none of these tokens had ever moved. With the intention to maximize mortgage reimbursement, the event firm was additionally waiving all of the loans to the muse.

Additionally they added that they have been funding prime safety researchers to proceed tracing the 577 ETH exploit and pursue any recoverable funds. They claimed that if something was recovered, it could circulate to the victims first. Kinto commented that their founder would personally donate $55,000 so each eligible sufferer might obtain as much as $1,000 per tackle then. This could be certain that 80% of all depositors obtained their full quantity again.