A whale in the DeFi area lost about $40M after Kinto stopped operations and SwissBorg was hacked. News media‘s report notes that the events moved token prices, triggered rescue efforts, and led platforms to promise repayments. The situation highlights operational and technical weaknesses affecting both large and small investors.
Incidents and timeline
A Layer‑2 project on Ethereum announced its stop after a $1.6M hack and a $1M debt. The recovery plan, “Phoenix,” failed and the K token fell by about 81%. Investors must remove assets before the Sept. 30, 2025, withdrawal date, according to Jina, and the hack, debt, and token drop caused liquidations and big losses—one whale lost about $40M.
At the same time, SwissBorg, with more than one million users in 47 countries, suffered a hack via a third party API (Kiln). About $41M in Solana (SOL) was stolen, experts reports, and SwissBorg publicly promised to pay back users, adding pressure on the firm’s finances and operations.
Systemic risks and investor impact
Both events expose three core problems: code safety, reliance on outside companies, and reward plans. Kinto’s hack stemmed from an ERC‑1967 Proxy standard weakness, illustrating risks in proxy setups and contract upgrades. SwissBorg’s theft arose from a faulty third party API, showing how outsourced services can shift operational risk onto established platforms. Kinto’s very high yields (a noted 130% APY in USDC pools) signal fragile incentive designs that can accelerate outflows when stress hits.
The proxy contract exploit, aggressive yield practices, and a compromised third party API combined to produce heavy losses and repayment commitments. Kinto’s Sept. 30, 2025 withdrawal deadline is the next clear step for affected investors, Jina’s report states.
