KAITO plunged nearly 20% after X revoked API access for InfoFi platforms that rewarded users with cryptocurrency tokens for posting, a policy shift announced by the social network's head of product, Nikita Bier, who cited rampant AI-generated spam as the reason for the crackdown.
What Happened: X Cuts Off Token Reward Apps
The social network moved to block third-party applications that paid users in crypto for their posts. Bier said the category of projects, known as InfoFi, had flooded the platform with automated content.
"We have revoked API access from these apps, so your experience on the social network should soon improve (once the bots realize they are no longer being paid)," Bier wrote.
Kaito, one of the most prominent InfoFi platforms, saw its token drop from $0.70 to $0.55 following the announcement. The project had used AI to analyze on-chain data and social sentiment, offering users points called "yaps" for posting about cryptocurrency that could be converted into KAITO tokens.
Founder Yu Hu announced the platform will abandon its Yaps reward system entirely.
A new marketing product called Kaito Studio will replace it.
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Why It Matters: InfoFi Model Deemed Unsustainable
The API ban effectively destroys the core mechanism InfoFi platforms used to attract users and generate engagement. A Kaito representative acknowledged the spam problem had become untenable.
"After discussions with X, it was agreed that a fully decentralized content distribution system is no longer viable and does not meet the needs of high-quality brands, serious content creators, or X as a platform," the representative said.
The token currently trades roughly 80% below its all-time high of $2.88, reached in Feb. 2025. Trading volume surged 115% to $138.5 million as the price collapsed.
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