Ethereum L2 Kinto shuts down after July $1.6M hack
The Kinto team announced the project’s closure following a July hack that stole $1.6M. The K token plunged 81%, and investors will recover only part of their funds.
Ethereum Layer 2 project Kinto, which branded itself as a “modular exchange” with full KYC, announced its closure after a July hack. The exploit allowed an attacker to mint 110,000 fake tokens and drain 577 ETH (about $1.6M) from Morpho and Uniswap pools.
After the attack, the K token price collapsed by 95%. Despite an attempted relaunch under the name Phoenix, which included issuing a new token and securing a $1M loan, the project failed to restore liquidity. According to founder Ramon Recuero, the team had been working without pay since July and decided to “close the project openly and in an orderly way.”
“Every day that we go on, the funds dwindle further. We’ve operated without salaries since July, and after the last financing path fell through, we have one responsible choice left: shut down cleanly and protect users/lenders as best as possible. Plenty of teams vanish into ‘zombie mode’. We won’t. We’re doing this orderly and out in the open,” he said.
Kinto will shut down on Sept. 30, and users are advised to withdraw funds before then. All remaining treasury assets will go to Phoenix creditors, who will recover about 76% of their invested capital. In addition, Recuero pledged $55,000 of his personal funds for Morpho users compensation, capped at $1,100 per address.
Kinto’s closure marks Recuero’s second failed venture: he previously founded Babylon Finance, which also shut down after the Rari Protocol hack.
Following the news, the Kinto token lost over 81% of its value, dropping to $0.46 with a market cap just above $1M.
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