Kaito AI reports X account hacks, attackers spread FUD after opening short positions

Hackers took control of Kaito AI’s official account and its founder, Yu Hu’s account. Both accounts were then used to spread false information about Kaito token wallets to cause token holders to panic sell and drive down the price of the token. Yu Hu and the Kaito team regained control of both accounts and have since deleted the misleading tweets.

The cryptocurrency industry is going through a gauntlet due to the recent dip in the value of Bitcoin, which has dragged down many altcoins with it. This volatility and uncertainty seem to have created the perfect breeding ground for bad actors.

Rather than wait out the storm, some are growing desperate enough to orchestrate scandals just to turn a profit.

These types of schemes are not uncommon in the industry. In late 2024, the Cardano Foundation’s official X account was hacked. The attackers posted false information about a lawsuit from the U.S. Securities and Exchange Commission (SEC) and promoted a scam token called “ADAsol.”

Several other incidents have occurred all over the cryptocurrency space and the latest victim of such schemes is Kaito AI.

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 bare with us as we investigate how this happened.

We had high standard security measures in place to prevent it -…

— Kaito AI 🌊 (@KaitoAI) March 15, 2025

Hackers gained control of Kaito AI’s accounts

Kaito AI is a prominent artificial intelligence platform specializing in cryptocurrency data aggregation and market analysis, and on March 15 2025, it experienced a significant security breach.

Both the official X account of Kaito AI and the personal account of its founder, Yu Hu, were compromised. The perpetrators used the account to spread misleading information suggesting that Kaito token wallets had been compromised, urging users to believe their funds were at risk.

The perpetrators aimed to incite panic among token holders, prompting them to sell off their tokens in panic and drive down the token’s price as a result.

Reports indicate that prior to the attack, the perpetrators opened short positions on KAITO tokens. This shows that they intended to profit from the anticipated decline in value.

Hackers are getting smarter. They didn't tweet a stupid CA and closed the replies like the majority do.

Instead, they shorted before tweeting a seemingly legit tweet concerning the $KAITO supply.

Perhaps also longed when they lost access. https://t.co/qRYmCQNWQK pic.twitter.com/R7kaMr09fy

— DeFi Warhol (@Defi_Warhol) March 15, 2025

According to Kaito AI founder Yu Hu, the same attacker was involved in a recent hack on DB News X account. The founder claimed the hacker made a cumulative profit of to $1 million from opening trades on Hyperliquid.

update –

we have a lead from @DefiSquared – looks like the same hacker associated with the recent hack on the @tier10k account is related to ours. overall profited close to $1mn from opening trades on hyperliquid ($300k today) – wallets below.

would appreciate it if anyone… pic.twitter.com/Aq0SElvhN9

— Yu Hu 🌊 (@Punk9277) March 15, 2025

Kaito AI team’s immediate response

The Kaito AI breach is not an isolated event. Several incidents have taken place in the cryptocurrency industry. On February 26, Pump.fun’s X account was hacked, and the attackers used the account to promote fraudulent tokens.

State-sponsored hacker groups have also been impersonating venture capitalists in virtual meetings to deceive and exploit stakeholders in the crypto space.

In the cryptocurrency market, the word “compromised” can quickly tank a project as investors are typically wary of scams and shady projects. So, it’s no surprise that the Kaito AI team moved swiftly to contain the situation. Upon identifying the unauthorized activity, the Kaito AI team quickly regained control of the compromised accounts. They promptly deleted the misleading posts and issued statements reassuring users that the token wallets remained secure and uncompromised.

The team emphasized that they had existing high-standard security measures in place to prevent such incidents, suggesting that the security breach was part of a broader trend of sophisticated social media account hacks targeting the crypto industry.

The official Kaito AI account wrote; “This account and @Punk9277 (the founder Yu Hu’s account) were just compromised. The KAITO wallets were NOT and are NOT compromised. We now have regained access to the twitter accounts. Please bare with us as we investigate how this happened.”

Yu Hu also made a post on his account after regaining access saying “nothing related to KAITO was compromised, no wallets or supply. My X account and the Kaito one were both compromised – with the hacker then posting false tweets. Once I was made aware, I checked the accounts and saw I was still logged into both so deleted the tweets, and changed the password.”

Despite the swift response, the incident unfortunately had an immediate effect on the KAITO token’s market performance. The spread of false information led to a temporary dip in the token’s price, just as the perpetrators intended. However, the Kaito AI team’s quick action and transparent communication helped stabilize the situation putting an end to any further potential damage from the breach.

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