- Kinto Network shuts down after a $1.6M hack exploiting ERC-1967.
- CEO Ramon Recuero states closure by September 2025.
- 76% repayments planned for affected Phoenix lenders.
Kinto Network, an Ethereum Layer-2 protocol, announced its closure by September 30, 2025, after a $1.6 million hack exploiting the ERC-1967 Proxy standard, impacting its token and lending operations.
The shutdown underlines vulnerabilities in DeFi protocols and raises concerns about the security and sustainability of aggressive yield models amid unsuccessful recovery efforts.
Kinto Network has announced its closure by September 2025 following a $1.6M exploit. ERC-1967 Proxy vulnerabilities led to a token collapse, disrupting its lending operations. The protocol was particularly affected by this security breach.
Founder Ramon Recuero communicated ongoing challenges, stating they were operating without salaries since July. He emphasized a need to shut down to protect users, reinforcing the decision as responsible. The team initiated the Phoenix Program to restore some operations.
The hack drained 577 ETH, affecting the project’s financial stability. Post-exploit, Kinto’s token plunged over 80%-95%, eroding trust within the community. The Phoenix lenders will receive partial repayments in the forthcoming wind-down process.
Notable assets affected included ETH and Kinto’s governance token. Marketplace confidence dwindled as Kinto attempted to secure financing, which ultimately failed. High-yield USDC lending pools lost liquidity, signaling systemic vulnerabilities.
Comparable incidents in DeFi illustrate the risks of smart contract weaknesses, stressing a need for improved security audits. Community discussions call for greater transparency, highlighting a widespread sentiment across on-chain forums for stricter governance.
Analysts observe that the Kinto shutdown echoes previous collapses within the DeFi space. This case underscores pressing issues within high-yield DeFi strategies and upgradeable contract models. Improved oversight and technological solutions are urgently required for future stability.
“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 and lenders as best as possible.” — Ramon Recuero, Founder, Kinto
