Kaito AI, an AI-powered data distribution center for web3, and its founder, Yu Hu, a developer and Citadel investment firm veteran, fell victim to a social media hack targeting their X profiles. The perpetrators of the hack used both accounts to spread misleading information, creating panic among its users.
Soon after opening their short positions on $KAITO, the hackers tried to create FUD (Fear, Uncertainty, and Doubt) among the hodlers to trigger a panic selling. They posted that the Kaito token wallets had been compromised, tricking the users into believing that their holdings were at risk.
The FUD forced many users to sell their tokens, causing a 10% downtrend. However, Yu Hu and the Kaito team took back control of the profiles and removed the deceptive tweets within hours, which made the token rebound to its previous market cap.
Kaito’s Wallets Remain Secure Despite the Social Media Hack
The hackers deliberately perpetrated the crime while the founder, Yu Hu, was asleep, which caused a delay in regaining control of the accounts. Despite the false tweets on X handles, the platform’s user crypto wallets remain unaffected. After recovering the handles, Yu Hu clarified that the wallets were safe and that the platform would continue its regular run.
The recovery of X profiles increased the buying volume of KAITO, making the short positions of the hackers ineffective. Yu Hu clarified that “nothing related to KAITO was compromised, no wallets or supply.” However, he is not aware how this attack could have happened.
Crypto Hacking Incidents Expected to Rise This Year: Expert Opinions
According to the Chainanalysis Crypto Crime Report, the number of individual hacking incidents increased from 282 in 2023 to 303 in 2024. This year, the blockchain industry witnessed the biggest hack ever with the Bybit incident, and the report forecasts that we can expect the crimes to increase.
The recent arrival of the general public to web3 and the crypto adoption by institutions have increased the amount that can be stolen, making it the favorite niche of hackers. The data shows that about 44% of the hacks were driven by private key compromises rather than code exploits. Often, the hackers steal the private keys and integrate the wallets with mixing services to launder.
Studies show that the shift of users from DeFi to centralized exchanges has increased the chances of high exploitation. Given that these exchanges manage huge amounts of user funds, the impact of a hack can be devastating. Experts suggest that traders use decentralized financial services to avoid hacking to an extent.
About KAITO
Kaito AI is an InfoFi platform that enables users to interact with structured data churned by artificial intelligence. Normal users, web3 traders, and developers can access valuable data for their needs by interacting with Kaito AI. The native token of the network is $KAITO, which is used as the primary medium of exchange. Those who HODL the tokens can participate in the key decision-making processes of the ecosystem. Here are the token allocation details:
- Ecosystem & Network Growth – 32.2%
- Binance Hodler – 2%
- Initial Community & Ecosystem Claim – 10%
- Long-term Creator Incentives – 7.5%
- Liquidity Incentives – 5%
- Foundation – 10%
- Core Contributors – 25%
- Early Backers – 8.3%
Kaito’s Current Price Scenario
Following the hack, there were some fluctuations in the price of KAITO. The tweets made by hackers created a panic among sellers. However, the regaining of access to the profiles and the deletion of those tweets ignited the revival. At the moment of writing, KAITO is trading for $1.40 per token, a 1.11% increase from the previous day’s candle.