The Kite Foundation announced on August 6 that it successfully detected and contained an attack on its KITE token on the Ethereum mainnet, preventing any loss of funds. “It was identified and contained immediately, and no tokens were lost,” the foundation stated on X. The security monitoring flagged unusual transfer activity, triggering an immediate shutdown of the malicious operation.
The project had established audit infrastructure prior to the incident, including an active bug bounty program on Sherlock since July 20 with rewards up to 10,000 USDC, and a CertiK security rating of 4.2 on its token page. These measures likely contributed to the rapid response.
KITE, which entered the top 100 cryptocurrencies in February with a market cap of $363 million and a fully diluted valuation of $2 billion, has since experienced a sharp decline. It now trades around $0.104, down over 67% from its March 6 all-time high of $0.3212, with a market cap of approximately $187 million and a rank of 123 on CoinMarketCap. Following news of the attack, 24-hour trading volume surged nearly 195% to about $60 million as the story circulated.
The incident adds to a growing wave of AI-assisted attacks targeting DeFi protocols. Non-custodial Bitcoin bridge Boltz suspended swaps on August 3 after AI-driven attackers iterated on vulnerabilities faster than its team could patch them. The same day, AQUA Wallet reported swap disruptions, and on August 5, Lightning wallet provider ZEUS took its infrastructure offline for a security audit. All three confirmed user funds were safe.
Yan Pritzker, co-founder and CTO of Swan, warned on X: “AI attackers are getting more and more sophisticated and small teams are going to have a tough time keeping up with the attacks.” Research from a16z Crypto showed that an off-the-shelf AI agent’s success rate at exploiting known vulnerabilities rose from 10% to 70% when fed structured attack knowledge. DefiLlama’s hacks database estimates total crypto stolen at around $16.9 billion.
Kite AI, designed as the first AI payment blockchain infrastructure for autonomous agent transactions with verifiable identity and programmable governance, now faces the challenge of restoring confidence in an environment where AI threats are rapidly evolving.
