Neobank Kontigo suffered a cybersecurity incident earlier this week resulting in the loss of $341,000 in client funds, but reimbursed the 1,005 users that lost money. The company was able to compensate clients having recently raised a $20 million seed round in December 2025 that included Coinbase and DST Global as backers. The US startup provides “stablecoin accounts” that enable clients in Latin America, especially Venezuela, to access dollar-denominated holdings through USDC stablecoins.
The company has attracted more than one million users in its first 12 months of operation. It said that it is under attack again today and has temporarily blocked access to protect funds. Kontigo’s story highlights two distinct risk categories facing stablecoin account holders: cybersecurity vulnerabilities and investment risks from higher risk yield-generating strategies.
While some stablecoin account providers take custody of the stablecoins, Kontigo offers a self-hosted app and is essentially a wallet provider. It uses multiparty computation (MPC) for the keys, which splits the key into fragments, and combines this with biometrics. This raises the question: what made a cybersecurity incident possible? While it has not yet published the cause of the losses earlier this week, and we didn’t receive a response to questions, there are multiple potential avenues.
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