16-3-2025 – Threat actors orchestrated a calculated attack on the social media presence of cryptocurrency analytics firm Kaito AI, employing an unprecedented strategy to profit from market manipulation.
The sophisticated operation, which unfolded on 15 March, saw hackers commandeer the X (formerly Twitter) accounts of both the platform and its founder, Yu Hu. Rather than deploying traditional cryptocurrency scams, the perpetrators executed a carefully orchestrated short-selling scheme.
Industry analyst DeFi Warhol revealed that the attackers had established short positions on KAITO tokens before disseminating fabricated claims about compromised wallets and security breaches. The manufactured panic triggered a swift market response, with the token’s value plummeting by more than 16 per cent, oscillating between $1.56 and $1.34.
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…
— Yu Hu 🌊 (@Punk9277) March 15, 2025
“Our security infrastructure remains robust,” declared Yu Hu after wresting control of his social media accounts through password resets. He emphatically dismissed claims of compromised wallets or token supplies, though subsequent investigations revealed the attackers had secured approximately $1 million through short positions on Hyperliquid.
The incident emerges against a backdrop of broader market challenges in the digital asset sphere. Recent analysis from DappRadar indicates a stark decline in NFT trading volumes, with figures plummeting 63% from December through February. The market witnessed a sequential decrease from $1.36 billion to $997 million in January, before settling at $498 million in February, though select collections maintain their trading momentum.
