KITE Foundation (@KiteAIFDN): Update on the KITE Token Security Incident and Contract Migration

Update on the KITE Token Security Incident and Contract Migration Earlier, our security monitoring systems detected abnormal KITE token transfer activity on the Ethereum mainnet. Preliminary investigation confirmed that the abnormal transfers resulted from a hacking incident. The team immediately activated its security incident response procedures and paused transfers of the KITE ERC-20 token on the Ethereum mainnet, as well as the relevant cross-chain channels. These measures promptly cut off the propagation path of the abnormal activity, prevented the risk from escalating further, and effectively isolated the affected tokens from the normal circulation system. In doing so, they protected the interests of legitimate holders, helped maintain market order, and provided a stable and controlled foundation for the subsequent investigation and migration efforts. The incident caused no asset losses to any user or to the Kite project, and its impact has been fully contained. Further investigation confirmed that the abnormal transfers were linked to certain wallet addresses that had been compromised by an attacker. Safeguarding on-chain security and the interests of token holders is Kite's foremost principle; accordingly, the team had no alternative but to undertake a full migration of the KITE token contract. The primary purpose of this full migration is to prevent the affected tokens from re-entering circulation and to ensure that the entitlements of every legitimate holder are fully preserved. Accordingly, the team decided to deploy a new KITE ERC-20 contract and carry out a full migration of the KITE tokens on the Ethereum mainnet. 1. New KITE Contract The new KITE ERC-20 contract has been deployed on Ethereum mainnet. It retains the existing token name and symbol, KITE, and follows these principles: The total supply of KITE will remain unchanged. Legacy and new KITE will be migrated at a 1:1 ratio. Based on the final snapshot taken following the security incident, the team will reconstruct the correct holder balances under the new contract. Every legitimate holder's KITE entitlement will be fully preserved at the 1:1 migration ratio. Addresses confirmed to be controlled by the attacker will be excluded and will not receive the corresponding new KITE. The new contract has completed an independent third-party security audit. The team has provided relevant exchanges with the audit report, test results, and on-chain verification information. Please verify the new contract address only through official Kite channels. Do not interact with any token contract or migration link that has not been officially confirmed. 2. Migration Process for On-Chain Holders For users holding KITE in standard self-custodial wallets (EOAs), the migration snapshot will be based on holder balances recorded at Ethereum mainnet block 25,692,498. This block was produced at 01:05:23 UTC on August 6, 2026. Migration eligibility and balances will be determined by the on-chain state at this block height; the timestamp is provided solely for ease of reference and verification. At the time this block was selected, the KITE contract on Ethereum mainnet had already been paused, and no further KITE transfers had occurred after the pause. The block therefore reflects a stable holder state following the suspension of transfers and provides the basis for balance reconstruction and distribution of the new token. Using this snapshot, the team will distribute new KITE to eligible legitimate holder addresses at a 1:1 ratio. The new tokens will be sent directly to the same addresses that held legacy KITE at the snapshot. Addresses confirmed to be controlled by the attacker will be excluded. Exceptional cases requiring manual verification will be handled through the applicable migration review process. Eligible users with standard wallets do not need to perform a manual swap, connect to a migration website, or authorize any smart contract. Until distribution and verification of the new tokens are complete, please retain control of the wallet that held the legacy tokens. Kite will never ask users to provide a seed phrase, private key, wallet password, 2FA code, or API key; to pay any migration fee; or to transfer assets to a designated address in order to receive the new tokens. If your original wallet has been compromised or is no longer accessible, or if you do not receive the new tokens or receive an incorrect amount after the migration is complete, please submit a request for manual review through the official support channel: KITE Token Migration Support Form Submitting a support request does not guarantee approval. The team will review each request based on snapshot records, on-chain data, and proof of wallet ownership. 3. Migration Process for Exchange Users If your KITE is held on a centralized exchange, you do not need to submit a migration form or perform any on-chain action. Exchange-side migration is being coordinated between each platform and the Kite team. The team is working with major exchanges in an orderly manner to complete the review of the new contract, confirm custody addresses, distribute the new tokens, update the KITE contract address in trading systems, and reconcile balances. Exchanges are completing system updates according to their respective schedules and gradually restoring KITE deposits and withdrawals. During the migration, exchange users do not need to withdraw legacy KITE to a personal wallet or use any third-party service to exchange it. User balances held on exchanges are being processed by the relevant platforms in accordance with their migration procedures. 4. Cross-Chain and Liquidity Arrangements Relevant KITE cross-chain channels will remain paused while the new contract migration and verification are underway. The team is completing the transition of cross-chain infrastructure, network configuration updates, reconciliation of total supply and asset status, testing of the new contract and cross-chain processes, and preparation of emergency pause procedures. In parallel, the team is addressing DEX liquidity under the legacy contract. Liquidity for the new KITE token will be restored once the migration is complete. Cross-chain functionality will be restored after distribution of the new tokens, balance reconciliation, and all security validations are complete. Until then, please do not attempt to move legacy KITE through any third-party bridging service. 5. Migration Progress and Next Steps The new KITE ERC-20 contract has been deployed and has completed an independent third-party security audit. Relevant exchanges are proceeding in an orderly manner with new contract reviews, system integration, balance reconciliation, new token distribution, contract address updates, and restoration of deposits and withdrawals. Cross-chain configuration updates and related infrastructure restoration are also progressing as planned. Kite will continue to advance cross-chain configuration updates and the restoration of related infrastructure, and will provide ongoing updates regarding subsequent arrangements through official channels based on progress in on-chain execution, security validation, and exchange integration. 6. Security Reminder During the token migration, scammers may impersonate support personnel, create fraudulent airdrop pages, or distribute phishing links. Please observe the following precautions: Never share your seed phrase, private key, wallet password, 2FA code, or API key with anyone. Do not connect to unverified migration websites. Do not sign wallet messages or transactions that you cannot independently verify. Do not pay any alleged migration fee to any address. Do not trust contract addresses sent via private message or accounts claiming to be official support. The new contract address and migration updates will be published exclusively through official Kite channels. As hacking techniques continue to evolve and become increasingly diverse, the team will work toward eliminating similar risks by continuously strengthening on-chain monitoring, access and key management, security audits, and incident response mechanisms. We will also continue to refine our risk detection and response processes, minimize the scope for such risks to materialize, and further improve the efficiency and speed with which anomalous activity is identified and addressed. Protecting the interests of our community is the overriding principle guiding our incident response and token migration. We will carry out each migration and verification step in a prudent and verifiable manner, preventing the affected tokens from re-entering circulation while ensuring that every legitimate holder's rights are fully preserved. Thank you to our community, exchanges, and ecosystem partners for their understanding and cooperation throughout this process. We will continue to advance the exchange-side migration, cross-chain configuration updates, and related infrastructure restoration, and will provide the community with timely updates. Information Notice: This announcement is based on investigation findings and migration progress confirmed as of the date of publication. If material new information becomes available, Kite will issue timely updates through official channels. The status of services on each exchange is subject to the relevant platform's official announcements and displayed service status. Kite Foundation