KAITO plunged by nearly 20% after X revoked API access for InfoFi platforms that rewarded users with cryptocurrency tokens for their posts, a policy change announced by the social network's product head, Nikita Bier, who cited the proliferation of AI-generated spam as the reason for this crackdown.
What happened: X cuts the reward applications in tokens
The social network has blocked third-party applications that paid users in crypto for their posts. Bier indicated that this category of projects, known as InfoFi, had flooded the platform with automated content.
"We have revoked the API access of these applications, so your experience on the social network should soon improve (once the bots realize they are no longer paid)," Bier wrote.
Kaito, one of the most prominent InfoFi platforms, saw its token drop from $0.70 to $0.55 after the announcement. The project used AI to analyze on-chain data and social sentiment, offering users points called "yaps" for their cryptocurrency posts, which could be converted to KAITO tokens.
Founder Yu Hu announced that the platform will completely abandon its Yaps rewards system.
A new marketing product called Kaito Studio will replace it.
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Why it matters: the InfoFi model deemed unviable
The API access ban effectively destroys the central mechanism used by InfoFi platforms to attract users and generate engagement. A Kaito representative acknowledged that the spam issue had become unmanageable.
"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 is currently trading about 80% below its all-time high of $2.88, reached in February 2025. Trading volume surged by 115% to $138.5 million as the price collapsed.
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