KAITO Price Drops 9% After False Supply FUD – Hacker Walks Away with $1 Million

The cryptocurrency market has been left reeling after a coordinated cyberattack compromised Kaito AI's official X (formerly Twitter) account and the personal account of its founder, Yu Hu. The attackers, who were able to spread false information about a potential supply issue with the KAITO token, triggered a panic-driven sell-off that sent the token price swinging nearly 20% before recovering.

The attack was carried out 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 (where he's asleep) to do it. Yu Hu reassured the community that KAITO wallets were never at risk and that an investigation into the security breach is ongoing.

The Attack

The attackers compromised Kaito AI's official X account and the personal account of its founder, posting a now-deleted message stating that they had identified irregular activity in multiple wallets linked to Kaito AI. The post claimed that a percentage of the token supply may have been compromised, triggering panic among investors.

The misleading posts caused an immediate drop in KAITO's price, before the information was corrected. 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 Hacker's Profit

Despite the correction of the false tweets, the price impact was already felt, with KAITO experiencing significant volatility in a short time frame. The hacker made an estimated $1 million, including $300,000 from KAITO-related trades. Their investigation, alongside DeFiSquared, linked the attack to the same group responsible for hacking DB's account days earlier.

The Pattern of Market Manipulation

This incident highlights how easily false information can disrupt crypto markets. Attackers strategically executing leveraged trades before spreading misinformation. DeFi Warhol, a crypto market analyst, stated that "hackers are getting smarter" and noted that the hacker shorted KAITO before spreading a seemingly legit tweet concerning the $KAITO supply.

Calls for Better Monitoring

The incident has intensified calls for better monitoring of suspicious market activity. Until stronger safeguards are in place, traders are advised to verify information across multiple channels and avoid reacting impulsively to unverified social media posts.

The use of X account breaches to manipulate crypto prices is becoming a pattern. Attackers are getting smarter. Instead of posting blatant scams, they shorted first before spreading a seemingly legit tweet concerning the $KAITO supply.

The Risks of Relying on Social Media

A single misleading post led to panic selling and millions in liquidations, demonstrating the risks of relying on social media for financial decisions. Traders are advised to be cautious and verify information across multiple channels before making any investment decisions.

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