Kinto Token Plummets 92% After Exploit and Token Unlock

The native token of Kinto (K), a modular decentralized exchange (DEX), has experienced a dramatic decline, losing nearly 92% of its value in just 24 hours. This sudden crash occurred after the project confirmed an off-chain exploit tied to its Arbitrum deployment. The token's price hit a new all-time low of $0.5114 on July 10, sparking widespread panic, accusations of mismanagement, and claims of a “rug pull” within the crypto community.
The official Kinto X account acknowledged the incident, stating that "an exploit has happened OFF the Kinto network impacting the $K token deployment in Arbitrum." The team reassured users that funds within Kinto wallets and bridge vaults remain secure and that an ongoing investigation is being conducted with the assistance of security firms Seal 911, Hypernative, Venn, and Zeroshadow.
While the exploit raised immediate concerns, community members quickly pointed out another potential factor: a July 1 token unlock that released 73.6% or 1.86 million of investor tokens, effectively doubling the circulating supply. This event likely created immense sell pressure, as investors who had bought in around $10 rushed to sell their tokens. Analysts, such as HumzyTrades, highlighted that at least $15 million worth of K tokens were unlocked at the end of June, suggesting that early investors may have timed their sales with the bullish market.
This sudden increase in available supply, combined with the alleged exploit announcement, created a perfect storm of panic selling. Within hours, K crashed from $8.12 to under $1, with brief rebounds quickly erased. One user, Ichiro Kenz, tracked the chaotic price swings in real time, noting that the price jumped to $3.33 and then back to $0.782 within a short period. At the time of this writing, the token had shed 91.9% of its value to reach $0.5114. The carnage also extended across all timeframes, with K down 85.3% across three months, 91.0% over the past 30 days, and 85.8% in the last week.
Ask Aime: What went wrong with Kinto's Arbitrum deployment?
Amid the chaos, sentiment turned sour, with influencers and community members declaring “Kinto rugged” and labeling it a “scam.” The firestorm spread to other users, with many expressing frustration and disappointment. Trader Dan the Man pressed the team for accountability, demanding an immediate and detailed explanation. Others echoed his frustration, citing poor communication and a lack of contingency planning.
This debacle occurs amid a volatile security landscape. A recent report identified code vulnerabilities and wallet exploits as two of the biggest security issues plaguing the industry, with Ethereum-based ecosystems like Arbitrum proving especially vulnerable. The incident highlights the need for enhanced security measures and regulatory oversight to protect investors from such events. The community is now closely monitoring the situation, awaiting further developments and potential actions from the relevant authorities.

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