Kinto Network’s governance token has lost more than 91% of its value after the team announced it will shut down its Ethereum layer-2 blockchain by the end of September. The decision follows months of setbacks, including a devastating hack and failed fundraising efforts.
The project, built on Arbitrum and settled on Ethereum, tried to combine centralized exchange efficiency with decentralized security. It also offered tokenized stock trading of companies like Apple and Microsoft. But despite its ambitious plans, Kinto could not survive the financial and security challenges.
Hack and Failed Rescue Plan
In July, an industry-wide exploit drained about 577 Ether (worth $2.4 million) from Kinto’s protocol. The vulnerability came from the ERC-1967 Proxy standard, a widely used OpenZeppelin codebase. Several projects were affected, but Kinto never fully recovered.
The team raised $1 million in debt to restart its “modular exchange,” yet worsening market conditions killed further fundraising. “Every day that we go on, the funds dwindle further. We’ve operated without salaries since July,” the team wrote in a Medium post. They added that shutting down cleanly was the only responsible choice left.
Kinto will return remaining assets to lenders, including $800,000 of Uniswap liquidity. Lenders are expected to recover about 76% of their loan principal. Victims of the hack will also receive a $1,100 goodwill grant per affected address, with co-founder Ramon Recuero personally contributing over $130,000.
Kinto’s Second Collapse
This is Recuero’s second crypto project to fail. His earlier venture, Babylon Finance, shut down in 2022 after a $3.4 million hack.
Following the shutdown news, the Kinto token (K) has fallen 91% to $0.38, with its market cap barely above $1 million. The token had reached a peak of $14.5 million just weeks earlier in mid-August.
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