K9 Finance gives Shibarium until Jan 6, 2026 to repay $700K+ or face partnership breakup
K9 Finance, an official Shibarium partner and liquid-staking platform, has issued a public ultimatum to the Shiba Inu team: fully compensate victims of a September Shibarium bridge exploit by January 6, 2026 or face review and potential severing of the partnership. The attacker used a flash loan to gain validator voting power, submit a fraudulent Merkle root and drain assets. K9 reports losses exceeding $700,000 in KNINE tokens plus stolen ETH, SHIB, LEASH, ROAR and TREAT. According to later reporting, the Shiba Inu team allegedly offered the attacker 50 ETH and immunity from prosecution to avoid returning funds; K9 countered with a 5 ETH bounty to recover frozen tokens. K9 says it followed recovery protocols and engaged privately with the Shiba Inu team, but communications later stopped, prompting the DAO’s public deadline. The exploit triggered significant SHIB volatility — the token fell as much as 36% — though subsequent burn activity and reduced exchange supply have been cited as partial fundamental support. Traders should monitor the January deadline, unresolved restitution mechanics, DAO governance actions and any on-chain recovery activity; these factors could drive short-term volatility across Shibarium-linked tokens, affect staking and liquidity on the chain, and influence SHIB price dynamics.
Bearish
The news is broadly bearish for SHIB and other Shibarium-linked tokens in the near term. A major bridge exploit, unresolved restitution and a public ultimatum increase uncertainty and reduce confidence in the protocol’s security and governance. The immediate impact — a reported 36% drop in SHIB after the exploit — demonstrates strong downside pressure. Ongoing disputes between K9 Finance and the Shiba Inu team, the possibility of a DAO vote to sever partnerships, and unclear recovery mechanics could further depress demand, reduce staking and liquidity on Shibarium, and trigger sell-side pressure as users withdraw or reduce exposure. However, the long-term effect may be partially mitigated if funds are recovered, compensation is made, and on-chain metrics (burns, lower exchange supply) continue to improve fundamentals. Until restitution and governance concerns are resolved, expect heightened volatility and a biased downside for SHIB.