KAITO Drops 20% as X Blocks InfoFi Apps to Fight Spam

X has revoked API access for projects labeled as 'InfoFi' in an effort to reduce spam and AI-generated content on the platform according to reports. The move was announced by Nikita Bier, the platform's Head of Product, who stated that apps rewarding users for posting had led to a surge in low-quality content as data shows. The policy change is part of a broader effort to improve user experience and curb the spread of spam according to the platform.

Kaito, the native token of the InfoFi network, dropped 20% in value following the announcement. At one point, the token traded around $0.56, down from $0.7 just hours earlier according to trading data.

The sharp decline highlights the direct link between X's API policies and the financial performance of projects integrated with the platform according to analysis.

Bier emphasized that the change was necessary to address the growing volume of spam and bot-generated replies as reported. "Your X experience should start improving soon (once the bots realize they're not getting paid anymore)," he wrote in a post according to his statement. The statement also directed developers whose accounts were terminated to consider alternatives such as Meta's Threads or Bluesky as advised.

Why Did This Happen?

The shift was driven by a rising tide of AI-generated content on X, which had degraded the user experience and diluted the value of organic content according to reports. Projects like Kaito had incentivized users to post frequently in exchange for token rewards, leading to a surge in spam as observed. Bier called the content a "tremendous amount of AI slop," emphasizing that the platform could no longer tolerate these practices according to the platform's analysis.

The move also aligns with broader concerns about bot activity and the impact of algorithmic changes on engagement as noted. Some users have pointed to a decline in visibility of crypto-related content on X, citing algorithmic shifts and moderation as possible causes according to user feedback.

How Did Markets React?

Kaito's token has been among the most affected assets in this regulatory crackdown according to market analysis. The token has a market cap of around $140 million and a fully diluted valuation of $586 million, down from a peak of nearly $2 billion in February 2025 as reported. Analysts suggest that the decline in value reflects both the immediate impact of the policy change and broader concerns about the sustainability of the InfoFi model according to analysis.

In addition to Kaito, other InfoFi projects are likely to face similar challenges as they lose access to X's APIs as stated. Some projects had already begun shifting toward platforms like Bluesky and Threads in response to X's evolving policies as reported.

What Are Analysts Watching Next?

Crypto observers are closely monitoring whether the move will lead to long-term changes in how X handles content and engagement according to industry analysis. Some argue that X's policies may inadvertently reduce user participation in crypto communities, especially if developers are forced to migrate to less established platforms as noted.

Others suggest that the real issue lies in the inability of platforms to distinguish between human and bot activity according to experts. Ki Young Ju, founder of CryptoQuant, pointed to a surge in bot-generated posts on X, arguing that improved bot detection would be more effective than outright bans according to his analysis.

The debate over X's handling of crypto content is likely to continue as users and developers adjust to the new landscape according to market observers. The impact of the policy change will depend on how well projects can adapt to alternative platforms and whether X can maintain its role as a hub for cryptocurrency discussions according to industry analysis.

X has also faced broader scrutiny over its AI-related features, including the Grok AI service, which has been under investigation for its role in generating non-consensual images according to reports. While that issue is distinct from the InfoFi crackdown, it underscores the platform's ongoing challenges with content moderation and governance as noted.