Kinto Coin crashes 99% after exploiting arbitration agreement

• Kinto’s $K Token plummeted 99% after the exploit of the Arbitrum Mint deal.
• The hackers minted 7m tokens and discharged USDC via the morpho lending platform.
• Kinto says the users’ funds are safe and a full investigation is ongoing.

The Kinto Network was hit seriously after an exploit in which smart contracts were linked to any deployment, leading to a collapse in the value of K-tokens.

Within just 24 hours, the price of $K tokens plummeted over 99%, shocking investors, causing a wave of uncertainty across the distributed financial (DEFI) space.

Violations caused by the minting contract at Arbitrum, not Kinto Mainnet itself, allowed for the fraudulent creation of millions of tokens, ultimately undermining the project’s trust in the token economy.

The exploit started with the Kint Network

Kinto confirmed that the exploit occurred outside the network, with the gold edition of the mint contract for K-Tokens, which was not properly protected against fraudulent mint.

The mainkint network, wallet and bridge vault remained unaffected, but the attacker was able to mint about 7 million K tokens.

According to early chain analysis, the malicious actors did not immediately dump the tokens into public exchanges, instead slowly began manipulating the market to maximize the apparent value of the token.

This stealth approach allowed attackers to use the inflated token prices as leverage for the lending platform Morpho, where they deposited the newly created tokens as collateral.

Shortly afterwards, hackers borrowed a large amount of USDC and then withdrawn funds, exposing protocols and the broader market to great losses.

The Morpho protocol holds unworthy tokens

One of the exploit’s most important aftershocks is the incidental damage done to Morpho, a protocol in which the attacker deposited the inflated $K token.

As the value of the token has been decimated, Morpho holds an inherently unvaluable token, raising concerns about how the platform manages bad debts and reduces financial hits.

The event highlights the systematic risks associated with the defi platform, which rely heavily on secured assets that can manipulate value.

Kinto has not revealed how much USDC has been released from Morpho, but recovery efforts are reportedly ongoing.

The rapid decline in K prices has caused panic

Just an hour after Thursday’s exploit, the value of the K-Token collapsed by 45%, causing a rapid sale that wiped out more than 99% of its value in total by Friday.

According to CoinmarketCap data, the token, which reached an all-time high of $11.89 in late March 2025, reached an all-time low of 0.4854.

At the time of writing, the token is trading at $0.7053, over 99.15% since its peak just three months ago, with a market capitalization of around $1.29 million.

As investors were rushing to leave the position, trading volumes surged beyond $2.72 million in 24 hours, further exacerbating the collapse.

Kinto is engaged in third parties to investigate exploits

After the exploit, Kinto immediately issued an official statement, ensuring that the mainnet funds and the bridge safe were not affected.

However, the company acknowledged the severity of the incident and subsequently brought in third-party security experts, including the exaggeration, SEAL 911, Venn and Zeroshadow, to investigate the exaggeration and support recovery efforts.

Kint Community. We are considering the situation between ourselves and third parties (Hypernative, Seal 911) – as soon as we have a clear grasp of what happened, we announce.

– Kint (@kintoxyz) July 10, 2025

Kinto has pledged to be fully transparent and will release a comprehensive report once the investigation is complete.

Despite the guarantees, market confidence continues to shake as social media users criticize the obvious lack of contract design and strict security audits for projects.

Some community members expressed dissatisfaction with what they view as a pattern of inadequate screening projects that hurt retail investors.

Kinto says that insiders were not selling tokens during the crash and that unlocking tokens remains scheduled for April 2026, but speculation continues to swirl whether the exploit could have been prevented.

The future of the project depends on being able to regain trust, patch security vulnerabilities, and recover lost value.

Until then, $K tokens will likely remain unstable as traders weigh the risks of staying in projects that are shaken by catastrophic exploits.