One Hack, One Fall: Kinto is Shutting Down After 1.6M Exploit

Token Price Collapses 90% After Kinto is Shutting Down News

Breaking News : Kinto is shutting down

An Ethereum Layer 2 project and modular exchange, Kinto is shutting down after a string of problems that the team could not fix. The project said it will stop operations on September 30 as it winds down services and tries to return what it can to users. This decision follows a major security breach in July and efforts to raise emergency funds that did not succeed. 

Source : Website

With a Single Exploit Ethereum Layer 2 Kinto is Shutting down

In early July a vulnerability in the token system allowed an attacker to mint fake tokens and drain value from Morpho lending pools. About 577 ETH roughly $1.6 million — was taken during the incident. The exploit came from a proxy-level weakness that has affected several projects using similar contract patterns. This shock hit Kinto’s token and its finances hard.

Source : X

How the team tried to respond

After the hack, the team worked to restore services and raised emergency funds from outside backers. The project founder also pledged personal funds to help reimburse some victims. Even so, the team says mounting debt and limited liquidity left them no practical path to rebuild the network and support ongoing operations. The group announced an orderly wind-down rather than an abrupt collapse.

What users can expect now

The team posted on its official channel that it will “shut down responsibly” and will try to return whatever funds are available today, while pursuing recoveries for remaining losses tomorrow. Founders and staff said they would keep working on reimbursements and on tracing stolen funds where possible. Traders should follow official Kinto updates for step-by-step guidance on claims and withdrawals.

What Users Need To Do Amid Withdrawal Difficulty

• Investers should check official channels for withdrawal updates.

• Withdraw remaining assets early to avoid difficulty access.

• Keep transaction records for reimbursements or claims.

• Be cautious of scams and follow verified channels' links.

• Wait for updates on compensation or reimbursement for affected lending pool users.

How Community, Market and Token Price Reacted 

When Kinto is Shutting down news sparked into the community it turned into shock, disappointment, and anger. The token price crashed and many holders saw heavy losses. The team plans to move remaining foundation assets into a safe and to notify affected parties about reimbursements where possible.

Source : Arbiscan

News that Kinto is shutting down pushed the K token price sharply lower. Exchanges and traders saw heavy selling as confidence evaporated, and several reports tracked falls of more than 80–90% from earlier levels. When the token supply is abruptly increased by a hack and users quickly leave, this kind of crash frequently occurs.

Lessons for users and small blockchain projects

The shutdown highlights how vulnerable new blockchain teams can be when security fails. Projects can lower risk with careful audits, larger cash cushions, faster user communication and recovery plans. For ordinary people, the episode is a warning: avoid keeping large amounts on new tokens or small platforms and favour established services for big deposits. Small, independent teams often do not have the same safety nets as larger projects or foundations.