Staking platform K9 Finance has threatened to sever ties with Shibarium. The warning comes after the September breach of the Shibarium bridge, which caused significant losses for the DeFi platform and its users.
K9 Finance has given the Shiba Inu team a deadline of January 6, 2026, to fully compensate affected users, or risk a formal review of their partnership, according to a message from its DAO official X account published on Thursday. The September hack cost K9 Finance more than $700,000 in KNINE tokens, in addition to other crypto assets, including Ethereum (ETH), Shiba Inu (SHIB), LEASH, ROAR, and TREAT.
K9 Finance issues ultimatum to Shibarium
After the attack, the Shiba Inu team offered the hacker a reward of 50 ETH and the promise of no criminal prosecution in exchange for not returning the stolen funds. At the same time, K9 Finance issued a 5 ETH bounty for the return of frozen tokens. In its statement, the K9 Finance team mentioned that it adhered to all protocols requested by Shiba Inu during the post-hack recovery process.
The K9 Finance team claims it kept communication channels with the Shiba Inu team open throughout the months following the attack, but that correspondence eventually ceased.
“K9 Finance DAO has followed every step requested by the Shib team regarding the Shibarium bridge hack and the process to make affected users whole… At this time, we have received no further communication or guidance in any of our private chats with the Shib team. The decision should not be interpreted as an attempt to create drama. It is a necessary step to provide clarity to our holders and ensure responsible governance,” the K9 Finance DAO said.
As reported by Cryptopolitan in mid-September, the attack began with a flash loan used to acquire 4.6 million BONE tokens. This temporarily granted the attacker control over two-thirds of validator voting power on Shibarium’s Layer-2 network. The hacker took advantage of the vulnerability to extract 224.5 ETH, valued at roughly $1.03 million, and 92.6 billion SHIB, worth about $1.27 million.
Other tokens, including Doge Killer (LEASH), Shiba Inu’s TREAT, and Shifu (SHIFU), were also stolen but were moved days after the breach, according to blockchain records. The breach was a result of a compromised checkpoint where the perpetrators inserted a fraudulent Merkle root. After this malicious root was added, the attacker executed a large transaction to drain approximately $1 million, which ballooned to $2.8 million at the time of this reporting.
Out of the twelve validator signing keys, ten approved the hacker’s malicious root state and withdrew the assets, with only validators run by K9 Finance and UnificationUND shunning the request. “If no complete restitution is provided by that date, the DAO will formally convene and vote on our future relationship with Shibarium, including whether continued business on the chain remains viable for the long-term health of the K9 ecosystem,” the organization’s statement concluded.
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