KAITO Plummets 9.07% After Cyberattack Spreads False Information

KAITO, a prominent cryptocurrency, experienced a significant price drop of 9.07% following a targeted cyberattack that compromised its official X (formerly Twitter) account and the personal account of its founder, Yu Hu. The attackers spread false information claiming that KAITO wallets were compromised, leading to panic among investors and a subsequent price decline to $1.30. The misleading posts were later deleted, and the price began to recover as clarifications were made by Yu Hu and the Kaito AI team. The token surged to $1.56, a 20% increase from its lowest point, before settling at $1.44, reflecting an overall 9.12% gain from the initial drop.

The attack was meticulously timed to occur while Yu Hu was asleep, indicating a coordinated effort to maximize impact before he could intervene. Sandra Leow, a research partner at Kaito AI, confirmed this timing, stating that the hackers waited for Yu Hu’s timezone to execute the attack. Yu Hu reassured the community that KAITO wallets were never at risk and that an investigation into the security breach is ongoing. Despite the quick restoration of control over the accounts, the price impact was already felt, with KAITO experiencing significant volatility in a short time frame.

The market reacted swiftly to the misinformation spread by the compromised Kaito AI X account, with KAITO’s price plummeting to $1.30 before rebounding. The attack initially triggered panic selling, leading to a sharp decline of 9.07% from its previous level. Once the false tweets were removed, KAITO’s price began recovering. Clarifications from Yu Hu and the Kaito AI team helped restore investor confidence. The token then surged to $1.56, a 20% increase from its lowest point. Despite this recovery, KAITO’s price did not remain at its peak for long. Following the price correction, the token settled at $1.44, reflecting an overall 9.12% gain from the initial drop. This pattern of extreme fluctuation suggests that the attackers may have capitalized on the volatility to execute profitable trades.

Market participants quickly took note of these price swings, with some questioning whether such a sudden movement was purely a reaction to misinformation or a deliberate market manipulation attempt. Yu Hu confirmed that the hacker made an estimated $1 million, including $300,000 from KAITO-related trades. His investigation, alongside DeFiSquared, linked the attack to the same group responsible for hacking DB’s account days earlier. He stated that a wallet opened a large Trump token long position on Hyperliquid [HYPE] just 30 minutes before DB’s X account was hacked. The compromised account then posted false claims about the token’s utility, triggering a price surge. After securing profits, the wallet moved funds to another address. It then opened a KAITO short position just before misleading tweets about a Kaito supply issue appeared.

Yu Hu tweeted that KAITO’s X account had two-factor authentication (2FA) enabled through Yubikey hardware. The breach raised concerns about how attackers bypassed such high-level security measures. He stated that a wallet opened a large Trump token long position on Hyperliquid [HYPE] just 30 minutes before DB’s X account was hacked. The compromised account then posted false claims about the token’s utility, triggering a price surge. After securing profits, the wallet moved funds to another address. It then opened a KAITO short position just before misleading tweets about a Kaito supply issue appeared. The use of X account breaches to manipulate crypto prices is becoming a pattern. Attackers strategically executing leveraged trades before spreading misinformation. DeFi Warhol, a crypto market analyst, commented that hackers are getting smarter. Instead of posting blatant scams, they shorted first before spreading a seemingly legit tweet concerning the $KAITO supply. The incident highlighted how easily false information can disrupt crypto markets. A single misleading post led to panic selling and millions in liquidations, demonstrating the risks of relying on social media for financial decisions. The hacker’s $1 million profit from shorting KAITO reinforced these concerns. Calls for better monitoring of suspicious market activity have intensified. Until stronger safeguards are in place, traders are advised to verify information across multiple channels and avoid reacting impulsively to unverified social media posts.