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{"actor":"system:backfill","investigation_id":"44a5d100-c0ea-4ae1-8203-a34a434b2e24","kind":"publish","page_slug":"kaito","published_at":"2026-05-19T15:51:41.983Z","sequence_num":1,"snapshot":{"content_type":"investigation","entity_name":"KAITO","sections":[{"content":"Kaito AI is an artificial intelligence platform launched in 2022 by Yu Hu, a former quantitative trader at Citadel. The platform aggregates Web3 information from sources including X (formerly Twitter), governance forums, research papers, podcasts, and community platforms, applying AI models to filter, summarize, and contextualize data for crypto market participants. Its primary product lines included Kaito Pro (an AI-powered search engine for Web3 data), Kaito Yaps (a system that rewarded users with points and tokens for posting crypto content on X), and Kaito Connect (an attention-and-capital allocation network). The KAITO token was deployed on the Base blockchain (Ethereum Layer 2) at contract address 0x98d0baa52b2d063e780de12f615f963fe8537553, with a total supply of 1 billion tokens. Token airdrop claims launched on February 20, 2025, concurrent with exchange listings on Binance and other major venues.","heading":"Platform Overview","severity":"low","sources":[{"credibility":2,"name":"What Is KAITO? Unpacking the AI-Powered Crypto Token of 2025 — Atomic Wallet","type":"news_article","url":"https://atomicwallet.io/academy/articles/what-is-kaito-unpacking-the-ai-powered-crypto-token-of-2025"},{"credibility":2,"name":"KAITO Token Airdrop Claims Launch on Base Ahead of Exchange Listings — CoinMarketCap","type":"news_article","url":"https://coinmarketcap.com/academy/article/kaito-token-airdrop-claims-launch-on-base-ahead-of-exchange-listings"},{"credibility":1,"name":"KAITO (KAITO) Token Contract on BaseScan","type":"on_chain","url":"https://basescan.org/token/0x98d0baa52b2d063e780de12f615f963fe8537553"}]},{"content":"On March 15, 2025, hackers simultaneously compromised the official Kaito AI X account and the personal X account of founder Yu Hu. The attackers posted false claims that Kaito token wallets had been compromised, urging token holders to take immediate action — a tactic designed to trigger panic selling. According to blockchain investigator DeFi Warhol, the attackers had opened short positions on KAITO tokens on the Hyperliquid perpetuals exchange prior to posting the false claims. The manufactured sell-off caused KAITO's price to swing nearly 20% before the team regained control of both accounts and deleted the misleading posts. Yu Hu subsequently confirmed the attacker had profited approximately $1 million in total from this scheme, with approximately $300,000 attributable to KAITO-related short trades. The same attacker was also allegedly linked to a prior hack of the DB News X account. No actual user funds or smart contract wallets were compromised in the incident — the attack was purely a social engineering and market manipulation operation. The Kaito team confirmed that user wallets remained secure.","heading":"X Account Hack and Market Manipulation (March 2025)","severity":"high","sources":[{"credibility":2,"name":"Kaito AI reports X account hacks, attackers spread FUD after opening short positions — Mitrade","type":"news_article","url":"https://www.mitrade.com/insights/news/live-news/article-3-699337-20250316"},{"credibility":2,"name":"Kaito AI reports X account hacks — CryptoRank","type":"news_article","url":"https://cryptorank.io/news/feed/f567c-kaito-ai-x-hack-attackers-spread-fud"},{"credibility":2,"name":"KAITO price drops 9% after false supply FUD — Hacker walks away with $1 mln — AMBCrypto","type":"news_article","url":"https://ambcrypto.com/kaito-price-drops-9-after-false-supply-fud-hacker-walks-away-with-1-mln/"},{"credibility":2,"name":"Kaito AI and founder Yu Hu's X social media accounts hacked — StartupNews","type":"news_article","url":"https://startupnews.fyi/2025/03/16/kaito-ai-and-founder-yu-hus-x-social-media-accounts-hacked/"},{"credibility":2,"name":"Kaito AI and Yu Hu X Accounts Hijacked to Spread Fake Alerts — The Shib Daily","type":"news_article","url":"https://news.shib.io/2025/03/17/hackers-hijack-kaito-ai-and-yu-hus-x-accounts-to-spread-fake-alerts/"}]},{"content":"Blockchain investigator ZachXBT launched a $5,000 bounty targeting InfoFi platforms including Kaito Yaps, Galxe, Layer3, Cookie, Wallchain, and Xeet, calling for the scraping of user data — including usernames, user IDs, on-chain addresses, and scores — to expose alleged AI-driven spam and manipulation within these reward systems. ZachXBT criticized InfoFi platforms generally for incentivizing low-quality, AI-generated content that floods crypto social media feeds. Following X's January 2026 API ban, ZachXBT noted that approximately 157,000 members of the Kaito Yapper community on X were banned as part of the platform-wide crackdown. His public stance treated the Yaps ecosystem as a vector for coordinated attention farming rather than genuine information curation. No specific financial fraud findings against KAITO by ZachXBT have been published as of May 2026; his criticism focused on systemic incentive design flaws rather than individual bad actors within the Kaito team.","heading":"ZachXBT Investigation: AI Bot Spam and Bounty","severity":"medium","sources":[{"credibility":2,"name":"ZachXBT Launches Bounty to Investigate Kaito Yaps and InfoFi Platforms for Potential Spam — Bitcoin Ethereum News","type":"news_article","url":"https://bitcoinethereumnews.com/tech/zachxbt-launches-bounty-to-investigate-kaito-yaps-and-infofi-platforms-for-potential-spam/"},{"credibility":2,"name":"ZachXBT Slams InfoFi Projects Like Kaito & Galxe for AI Bot Spam — EGW News","type":"news_article","url":"https://egw.news/crypto/news/31078/zachxbt-criticizes-infofi-projects-for-encouraging-NfJ4UH_22"},{"credibility":2,"name":"InfoFi projects under attack for rewarding AI slop social media content — Cryptopolitan","type":"news_article","url":"https://www.cryptopolitan.com/infofi-projects-rewarding-ai-slop-content/"}]},{"content":"The KAITO token launch on February 20, 2025 drew immediate criticism over its tokenomics structure. On-chain investigator RunnerXBT reported that 43.3% of the total supply was reserved for insiders, comprising approximately 35% for the core team and 8.3% for early investors. Only 10% of the supply was allocated to the initial community airdrop, with no vesting period applied — meaning tokens were immediately liquid and subject to sell pressure at launch. Community members and market observers criticized the allocation as disproportionately favorable to insiders relative to the user base that had built the platform's mindshare value through Yaps participation. Blockchain specialist Anndy Lian publicly warned the token could follow the pattern of 'big hype, big spike, then massive sell-off.' On-chain data confirmed that top airdrop claimers sold their tokens quickly following the TGE, contributing to early downward price pressure. KAITO opened at approximately $1.14 on Binance and reached an all-time high of $2.88 before declining significantly.","heading":"Airdrop Tokenomics Controversy","severity":"medium","sources":[{"credibility":2,"name":"Kaito AI Airdrop Raises Tokenomics & Sell-Off Concerns — CryptoTimes","type":"news_article","url":"https://www.cryptotimes.io/2025/02/20/kaito-ai-airdrop-raises-tokenomics-sell-off-concerns/"},{"credibility":2,"name":"Insider Concerns Raised as Kaito Airdrop Commences — BitPinas","type":"news_article","url":"https://bitpinas.com/cryptocurrency/insider-concerns-kaito-airdrop/"},{"credibility":2,"name":"Kaito tokenomics out — concerns over insider allocations mount — crypto.news","type":"news_article","url":"https://crypto.news/kaito-tokenomics-out-concerns-over-insider-allocations-mount/"},{"credibility":1,"name":"Kaito AI airdrop sparks tokenomics, early selling concerns — CoinTelegraph","type":"news_article","url":"https://cointelegraph.com/news/kaito-ai-airdrop-tokenomics-concerns"}]},{"content":"On January 15, 2026, X revised its developer API policies to prohibit applications that compensate users for posting content. X product lead Nikita Bier stated that InfoFi apps had created 'a tremendous amount of AI slop & reply spam' on the platform and announced revocation of their API access. Data cited in reporting showed automated bots generated 7.75 million crypto posts on a single day (January 9, 2026), a 1,224% spike attributed to InfoFi reward incentives. Following the ban, Kaito founder Yu Hu announced the platform would sunset Yaps and its incentivized leaderboards and pivot to a new product called Kaito Studio — a more selective, tier-based marketing platform targeting YouTube and TikTok in addition to X. The KAITO token dropped between 15% and 24% in the immediate aftermath of the announcement. By the time of the ban, KAITO's market capitalization had fallen to approximately $140 million, down from a fully diluted valuation peak near $2 billion in February 2025 — a decline of roughly 93% from peak FDV. The token was trading more than 80% below its all-time high of $2.88.","heading":"X API Ban and Yaps Sunset (January 2026)","severity":"high","sources":[{"credibility":1,"name":"Kaito token plummets after X revises API policies to ban InfoFi crypto projects — The Block","type":"news_article","url":"https://www.theblock.co/post/385805/kaito-token-plummets-x-revises-api-policies-ban-infofi-crypto-projects"},{"credibility":1,"name":"Kaito to sunset Yaps after X bans incentivized posting apps — CoinDesk","type":"news_article","url":"https://www.coindesk.com/business/2026/01/15/kaito-to-sunset-yaps-as-x-cracks-down-on-infofi-apps-token-falls-17"},{"credibility":2,"name":"X Bans InfoFi Apps as Kaito Sunsets Yaps, Pivots to Creator Platform — CoinSpeaker","type":"news_article","url":"https://www.coinspeaker.com/x-bans-infofi-crypto-apps-kaito-token-drops/"},{"credibility":2,"name":"InfoFi API Ban Crashes KAITO Price by 21% — CCN","type":"news_article","url":"https://www.ccn.com/analysis/crypto/infofi-api-ban-crashes-kaito-price-analysis/"}]},{"content":"Multiple independent phishing campaigns impersonating the KAITO airdrop have been documented. The 'Claim KAITO' scam, catalogued by security researcher PCRisk, imitated the Kaito AI platform and directed users to connect their wallets to a cryptocurrency drainer under the pretext of claiming KAITO tokens. A separate 'Kaito Airdrop' scam was found to promise users a tripling of their investment, a common social engineering lure. These campaigns were external to the Kaito team and exploited the visibility of the legitimate February 2025 airdrop. Users are advised to verify any airdrop claim interface against the official Kaito AI domain and documentation. Kaito's own airdrop terms explicitly state it is the user's sole responsibility to verify the authenticity of any website or link claiming to be from Kaito.","heading":"Fake Airdrop Phishing Campaigns","severity":"high","sources":[{"credibility":2,"name":"Kaito Airdrop Scam — Removal and Recovery Steps — PCRisk","type":"community_report","url":"https://www.pcrisk.com/removal-guides/33838-kaito-airdrop-scam"},{"credibility":2,"name":"Claim KAITO Scam — Removal and Recovery Steps — PCRisk","type":"community_report","url":"https://www.pcrisk.com/removal-guides/32698-claim-kaito-scam"},{"credibility":1,"name":"Airdrop Terms — Kaito AI Official Docs","type":"official","url":"https://docs.kaito.ai/legal/airdrop-terms"}]}],"sources_used":[],"summary":"KAITO is the native token of Kaito AI, an AI-powered 'InfoFi' (information finance) platform built on Base blockchain, founded by former Citadel quantitative trader Yu Hu and launched in February 2025. On March 15, 2025, both the official Kaito AI X account and Yu Hu's personal account were compromised by hackers who spread false claims of wallet breaches while simultaneously holding short positions on KAITO, netting an estimated $1 million in profit from the manufactured price panic. The platform faced additional scrutiny from blockchain investigator ZachXBT over alleged AI bot spam incentivized by its Yaps reward system, which was ultimately sunset in January 2026 after X revoked API access to all InfoFi applications.","timeline":[{"date":"2022-01-01","event":"Kaito AI founded by Yu Hu, former Citadel quantitative trader, as an AI-powered Web3 information aggregation platform.","source":"Atomic Wallet Academy","source_url":"https://atomicwallet.io/academy/articles/what-is-kaito-unpacking-the-ai-powered-crypto-token-of-2025"},{"date":"2025-02-20","event":"KAITO token officially launched with airdrop claims opening on Base blockchain. Token listed on Binance and other major exchanges. Opening price approximately $1.14, reaching intraday high near $1.96. Community criticism emerges over 43.3% insider allocation and only 10% community airdrop with no vesting.","source":"CoinMarketCap / CoinTelegraph","source_url":"https://cointelegraph.com/news/kaito-ai-airdrop-tokenomics-concerns"},{"date":"2025-02-20","event":"KAITO reaches all-time high of $2.88, implying a fully diluted valuation near $2 billion.","source":"The Block","source_url":"https://www.theblock.co/post/385805/kaito-token-plummets-x-revises-api-policies-ban-infofi-crypto-projects"},{"date":"2025-03-15","event":"Hackers compromise both the official Kaito AI X account and founder Yu Hu's personal X account. False claims of wallet compromise are posted to trigger panic selling. Attackers had pre-positioned short positions on Hyperliquid. KAITO price swings nearly 20%. Attacker profits estimated at $1 million total, ~$300k from KAITO trades.","source":"Mitrade / AMBCrypto","source_url":"https://www.mitrade.com/insights/news/live-news/article-3-699337-20250316"},{"date":"2025-03-16","event":"Kaito team regains control of X accounts and confirms user wallets were not compromised. Yu Hu discloses attacker profit estimates publicly.","source":"The Shib Daily","source_url":"https://news.shib.io/2025/03/17/hackers-hijack-kaito-ai-and-yu-hus-x-accounts-to-spread-fake-alerts/"},{"date":"2025-01-01","event":"ZachXBT launches $5,000 bounty to scrape user data from InfoFi platforms including Kaito Yaps, Galxe, Layer3, Cookie, Wallchain, and Xeet, citing AI bot spam concerns.","source":"Bitcoin Ethereum News","source_url":"https://bitcoinethereumnews.com/tech/zachxbt-launches-bounty-to-investigate-kaito-yaps-and-infofi-platforms-for-potential-spam/"},{"date":"2026-01-09","event":"Automated bots generate 7.75 million crypto posts in a single day — a 1,224% spike — attributed to InfoFi incentive systems including Kaito Yaps.","source":"CoinSpeaker","source_url":"https://www.coinspeaker.com/x-bans-infofi-crypto-apps-kaito-token-drops/"},{"date":"2026-01-15","event":"X revokes API access for all InfoFi applications, citing AI slop and reply spam. Kaito founder Yu Hu announces sunset of Yaps and incentivized leaderboards. KAITO token falls 15–24%. ZachXBT notes 157,000 Kaito Yapper community members banned.","source":"CoinDesk / The Block","source_url":"https://www.coindesk.com/business/2026/01/15/kaito-to-sunset-yaps-as-x-cracks-down-on-infofi-apps-token-falls-17"},{"date":"2026-01-15","event":"Kaito announces pivot to Kaito Studio, a selective tier-based marketing platform expanding to YouTube and TikTok.","source":"CoinDesk","source_url":"https://www.coindesk.com/business/2026/01/15/kaito-to-sunset-yaps-as-x-cracks-down-on-infofi-apps-token-falls-17"}]},"v":1}