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On March 15, the cryptocurrency community saw a new type of attack. Anonymous hackers gained control of Kaito AI and its creator, Yu Hu’s, accounts. But in contrast to normal scams that sell false tokens, this attack had a different motive—one for market manipulation for gain.
A New Type of Crypto Attack
Rather than conducting a traditional phishing attack or token promotion, the attackers circulated messages stating that Kaito AI users’ funds were under threat. This panic selling caused the price of KAITO tokens to go down. Meanwhile, the hackers had already gone short on KAITO, making money out of the instant panic.
Market Manipulation in Action
From the price chart, the plan was carried out well by the attackers. With fear running rampant in the community, the price of KAITO fell, enabling the hackers to liquidate their short positions.
It marks the turning point in crypto-based attacks. Instead of using phishing links or imitation projects, malicious actors are now using market psychology—instilling fear to influence prices.
This hack raises security concerns in the crypto community. If attackers can breach company accounts and utilize them to influence token prices, more projects may be vulnerable. It also points towards the necessity of improved cybersecurity protocols and investor vigilance to prevent falling prey to such fear-based manipulation.
The Kaito AI hack is a bitter reminder that in cryptocurrency, security and trust are paramount. Be smart, stay alert, and never act on haste-driven messages.
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