Just Bad Luck?

Hidden backdoors don't get a knock before entering.

Kinto's $K token got hijacked through a proxy exploit that let attackers mint 110k tokens, drain $1.55 million from Uniswap and Morpho pools, and nuked the price by almost 95%.

The team points fingers at sophisticated hackers exploiting old OpenZeppelin code - not their pristine contracts or their freshly unlocked insider allocations.

Pure technical malfunction, they swear.

Just awful luck that their founder's previous project also faced a major crisis.

When lightning strikes twice in the same place, do you blame the weather - or start looking for the lightning rod?

Clean bridges. Secure infrastructure. Third-party code gone wrong.

But Kinto still lost $1.55 million, tanked their token by almost 95%, and left their community wondering: hack, heist, or just another DeFi ritual where founders profit, victims cope, and post-mortems polish the rubble?

Ramon Recuero's Kinto positioned itself as Ethereum's golden road for regulated finance.

Their Arbitrum-deployed $K token launched with professional swagger - exchange listings, institutional backing, and all the trappings of legitimate infrastructure.

Until July 10th, when mathematical certainty met human suspicion in the most uncomfortable way possible.

A hidden proxy backdoor let attackers mint 110K $K tokens. They drained every available pool, crashing the price from $7.68 to $0.50 within 24 hours.

The team's initial response was suspiciously vague: "Kinto community. We are looking into the situation ourselves and with third parties (Hypernative, Seal 911) - as soon as we have a clear picture of what has happened we will make an announcement."

But in crypto forensics, the technical details often paint the clearest picture.

How does a backdoor exploit unfold with such surgical precision?

The Ghost in the Machine

Ramon Recuero's explanation arrived wrapped in technical jargon thick enough to choke a blockchain explorer.

"Today, we got hacked by a state actor. They upgraded the implementation of the K token on Arbitrum and used it to mint fake K tokens that they dumped immediately."

State actor. Because nothing says "we're victims too" like blaming nation-state hackers for your token's collapse.

The exploit itself was real enough - a sophisticated backdoor buried in ERC-1967 proxy contracts, a widely-used but vulnerable proxy pattern that let attackers mint unlimited tokens while blockchain explorers showed nothing suspicious.

Security researchers at Venn Network had been tracking this vulnerability for months, playing a high-stakes game of whack-a-mole across thousands of vulnerable contracts.

Behind closed doors, security researchers raced to defuse the ticking timebomb.

Teams like Venn, Dedaub, and SEAL 911 quietly coordinated with vulnerable protocols, reaching out directly or through backchannels to help patch the proxy flaw before it could be exploited.

Some projects reconfigured contracts. Others pulled funds. A few narrowly escaped disaster.

Kinto slipped between the cracks.

According to Ramon's timeline, the disclosure happened July 9th at 20:17 UTC. The attack came July 10th at 08:40 UTC.

Twelve hours. Just enough time to panic - not enough to patch.

But here's where the technical narrative gets interesting: the attackers minted exactly 110,000 $K tokens before draining the pools.

Not 100,000. Not 150,000. Exactly 110,000 - a suspiciously round number that suggests either remarkable restraint or intimate knowledge of the liquidity available.

Professional hackers don't usually stop at "just enough." They grab everything and sort it out later.

Was this surgical precision the mark of sophisticated attackers - or someone who knew exactly how much the market could absorb?

Babylon’s Shadow

Ramon Recuero's explanation might have carried more weight if he wasn't already standing in the wreckage of his previous venture.

Babylon Finance launched in 2021 with revolutionary promise: democratized asset management through community-driven investment strategies.

Professional-grade portfolio management for retail investors. Hedge funds for the people, powered by smart contracts and good intentions.

$200 million FDV at peak. $100,000 by 2022. A 99.95% collapse that vaporized investor capital faster than a leveraged long in a bear market.

But here's where the Babylon story gets complicated - and where Ramon's response defined his approach.

When the Rari protocol got hacked in April 2022, several Babylon investment pools lost $3.4 million.

The hack wasn't Babylon's fault, but Ramon made a choice that defined his leadership style: he made users whole anyway.

Despite Rari initially promising full reimbursement then backing out, Ramon personally coordinated a recovery fund.

Users got their money back. The team even gifted an extra 2% to cover fees and expenses, plus $100K to heart token holders who hadn't directly lost funds.

"Although the damage to Babylon is done and irreparable," Ramon wrote in his reimbursement post, "we are extremely happy that our users will recover all the losses from this hack."

Kinto emerged in 2024 wearing Babylon's clothes with fresh tailoring. Smart wallets instead of smart portfolios. Compliance theater instead of democratized finance. Same institutional cheerleaders, same revolutionary rhetoric, same founder promising this time would be different.

Revolutionary infrastructure has a way of revolving around the same people.

Different wrapper, identical pattern.

Both projects faced external crises that weren't technically their fault. Both saw Ramon step up to make users whole from his own resources.

Both left communities asking whether this pattern of crisis-and-recovery was noble leadership or calculated risk management.

If handling disasters becomes your specialty, what happens when the next one arrives?

Help Us Help You

Ramon's damage control playbook opened to a familiar chapter: promise everything, deliver nothing, buy time with technical theater.

"We're raising a recovery fund," he announced 3 days after the exploit. "Bootstrapping fresh liquidity isn't free. If you believe in Kinto's mission - safer, compliant DeFi - consider helping."

Not "we're making victims whole with our own funds." Not "we're taking responsibility for the security failure." Just a polite request for donations to clean up the mess.

The recovery plan sounded reasonable enough on paper: snapshot all balances before the hack, create a new K token on Arbitrum with those balances, fundraise to restore the $1.4M lost in Uniswap liquidity and Morpho vault balances.

Meanwhile, legitimate users who lost funds in the exploit would get their tokens back - but only if Ramon successfully raised enough money from "partners and existing investors" to make everyone whole.

The full technical post-mortem later revealed the sophisticated nature of the exploit, but questions about timing and beneficiaries remained unanswered.

Just another recovery fund for another crypto crisis.

When recovery plans depend on community funding, who bears the real cost?

Maybe it was a sophisticated proxy backdoor that caught everyone off guard.

Maybe the timing was pure coincidence - hackers striking at the worst possible moment.

Maybe it was state actors, maybe we will see the proof one day.

Maybe Ramon Recuero is just unlucky as hell, destined to watch his projects implode while he stands there holding the bag.

The proxy exploit was real.

$K v2 promises a fresh start, clean contracts, and restored faith. But promises are just promises until they're written in code that actually works.

Just bad luck?

Or just another day in DeFi, where the house always wins and the only thing truly decentralized is the blame?

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