Kaito AI Hacked, False Claims Cause Market FUD

On March 15, 2025, Kaito AI, an artificial intelligence-powered platform for crypto market analysis, and its founder, You, were targeted by hackers who gained control of their social media accounts on X (formerly Twitter). The attackers spread false claims that Kaito AI’s wallets had been compromised, warning users that their funds were at risk. This malicious activity was aimed at creating fear, uncertainty, and doubt (FUD) among users, potentially leading them to sell their KAITO tokens or withdraw their funds, which could have caused a significant drop in the token's price.

The hackers' strategy was more sophisticated than typical social media scams, which often involve promoting fake tokens. According to blockchain investigator Defi Warhol, the attackers opened a short position on KAITO tokens before posting their false claims, hoping to profit from a potential price crash. This tactic highlights the increasing complexity of cyberattacks in the crypto industry, where hackers are using advanced methods to manipulate market conditions for financial gain.

Kaito AI’s team swiftly regained control of the compromised accounts and reassured users that their wallets remained secure. The team emphasized that they had implemented robust security measures to prevent such incidents in the future, noting that the attack seemed similar to other recent breaches targeting crypto-related accounts. The company stated, “This account and @Punk9277 were just compromised. The KAITO wallets were NOT and are NOT compromised. We now have regained access to the Twitter accounts. Please bear with us as we investigate how this happened. We had high-standard security measures in place to prevent it – so it seems to be similar or the same to other recent Twitter account hacks. We’ll update as soon as we can. To reiterate – KAITO token wallets have not been compromised.”

The rise in such cyberattacks has led to an alarming increase in losses within the crypto ecosystem. The incident serves as a stark reminder of the importance of vigilance and robust security measures in the crypto industry. Users should be cautious of false claims and potential scams, while platforms must continually update their security protocols to protect against evolving threats. As the crypto industry continues to grow, so too will the sophistication of cyberattacks, making it essential for all stakeholders to remain vigilant and proactive in their approach to security.