Kaito founder denies front-running allegations…"Platform pivot has been in the works for months"

Infopai Kaito (KAITO), whose token price plunged after X (formerly Twitter) changed its API policy, has responded to front-running allegations that surfaced in the community.

On the 16th (KST), founder Yu Hu said on X that “key platform-related decisions were not made abruptly but have been prepared over the course of several months,” adding that “the allegations raised from outside are not true.”

Suspicions of insider trading at Kaito emerged following X’s API policy change. A day earlier, Nikita Bier, X’s head of product, announced that “apps that reward users for posting on X will no longer be allowed.”

After the announcement, Infopai tokens such as Kaito and CookieDAO (COOKIE) fell by about 20%. This is because the API policy change made “Yapping,” a core feature of Infopai, impossible.

Allegations were also raised that the project had learned of X’s policy change in advance and preemptively dumped tokens internally. Digital asset influencer VasuCrypto pointed out that “an address linked to the Kaito team deposited 5 million tokens to Binance seven days ago,” adding that “it could have been intended for selling.” He also said, “1.1 million tokens are scheduled to be unstaked tomorrow, and they may have proceeded with unstaking after learning in advance about X’s policy change.”

However, Hu said even internally the project did not know ahead of time when X would change its policy. He explained, “On the 13th, we received our first advance notice email from an X representative about the possibility of a service reassessment, and we immediately requested specific details,” adding, “On the 14th, we received an official legal notice from X, and the same day, after legal review, we submitted an official response and requested further clarification.” He continued, “We learned of Nikita’s post on the 15th at the same time as other users,” and added, “We did not receive any separate advance notice or definitive notification beforehand.”

As for why there was no prior announcement, he said, “This is not the first time we have received a legal notice from X, and in the past there was precedent of resolving matters smoothly through negotiations under a new enterprise contract,” adding, “Rather than making a unilateral external announcement within a short time frame, it was reasonable to wait for further discussions and clear explanations.”

He also said the new service “Kaito Studio” had been prepared for months regardless of the issue. Hu emphasized, “Kaito Studio is a project aimed at expanding beyond existing digital-asset-centered services into various platforms such as TikTok and YouTube and into areas outside digital assets; it is a new model that complements our existing service ‘Yaps,’” adding, “We had already secured partnerships, which is why we were able to respond quickly even to a sudden announcement.”

Finally, Hu said, “We plan to disclose the full roadmap and detailed plans separately at a later date,” and appealed that “we hope discussions will be based on facts rather than groundless suspicions.”