Crypto Hack Alert Kaito AI Social Media Breach Sparks Market Panic

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Kaito

March 16, 2025 by

  • Hackers compromised Kaito AI’s official X account and its founder Yu Hu’s account, spreading false security breach claims.
  • Misinformation caused KAITO to plunge over 13% before stabilizing at $1.43, with a $348.03M market cap.
  • Analysts suggest attackers may have shorted KAITO before spreading panic to profit from the crash.

Kaito AI, an AI-based platform and most popular for its capacity to analyze the crypto market, became a victim of a malicious social media hack on 15th March, spreading panic and disruption in the world of crypto. Both the platform and the official X account of the platform founder were compromised by the hack and led to the spread of misinformation regarding the platform’s security and safety of user funds.

The attackers hijacked the compromised accounts and made false postings, falsely reporting that Kaito AI wallets had been hacked and informing users that their funds were at risk. This false information spread rapidly and triggered a huge market panic. The token, which had been consistently trading, dropped by more than 13% before it could recover on Saturday.

As of now, the KAITO price is $1.43 with a 24-hour trading volume of $628.75 million and, a market cap of $348.03 million. The token price increased 2.08% in the last 24 hours.

KAITO 1D graph coinmarketcap

DeFi Warhol, a top analyst in decentralized finance, suggests the attackers could have taken advantage of the situation to start short positions on the token before posting the fake messages. Through creating urgency and causing a sell-out, they likely expected to profit from the resulting market disruption.

Kaito AI Hack Sparks Security Concerns

After the hack, Kaito AI issued a statement assuring users that the hack had been contained to the social media profiles and had no effect on the platform’s wallets and network as a whole. Kaito AI’s founder, Yu Hu, made a public assurance on social media that no tokens related to KAITO had been breached:

“Nothing related to KAITO was compromised, no wallets or supplies. My X account and the Kaito one were both compromised, with the hacker then posting false tweets,” he stated.

Sandra Leow of Kaito AI highlighted in an observation that the timing of the hack in the middle of Yu Hu’s sleeping hours indicated a planned effort to make the most of its effect on the market. The platform team took over the accounts again and assured the public that the platform is still secure.

*IMPORTANT*

Yu Hu & Kaito’s X accounts have been compromised.

There has been no compromised KAITO wallets.

They have waited for Yu Hu’s timezone (where he’s asleep) to do it – please ignore.

We’re working to get them back.

I’ll update here.

— Sandra 🌊 (@sandraaleow) March 15, 2025

It is part of a disturbing and increasing trend of cyberattacks on the cryptocurrency sector. Social media breaches, phishing attacks, and other security breaches have been an emerging menace, with the sector incurring huge financial losses. Cryptocurrency-related exploits and scams have been responsible for a whopping $1.53 billion loss in February itself, according to blockchain security firm CertiK. It also mentioned the $1.4 billion Bybit hack by the North Korea-based Lazarus Group as the single largest event of the month.

With the cryptocurrency market continuing to grow and develop, such incidents indicate the imperative need for stringent cybersecurity practices to protect the platform and users from increasingly rising cyber threats. The token has committed to continue striving to enhance security so that the funds and data of its users remain safe from any emerging threats.

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