X Kills Crypto Projects: Ban on API for InfoFi Apps

Yesterday,the X platform announced radical changes to its API policy for developers. X's Head of Product Nikita Bier posted:

"We're revising our developer API policy: We will no longer allow apps that reward users for posting on X (so-called 'infofi'). This has led to a huge amount of AI-generated slop and spam in replies."

He also noted that API access for such apps has already been revoked, and X will help developers transition to alternatives like Threads or Bluesky.

This change directly hit crypto projects that relied on users' social activity for token distribution. InfoFi projects like Kaito and Cookie DAO incentivized posts and replies on X, promising crypto rewards. But this led to massive spam: AI-generated comments flooded feeds, making the platform less useful. Many users in the Crypto Twitter community welcomed the decision, calling it a "cleanup" from bots.

Impact on $KAITO

According to CoinGecko data, the KAITO token dropped 17-20% immediately after the announcement, from around $0.67 to $0.5477 at the time of writing. This matches your information about a 20% drop. Kaito, an AI platform for crypto analytics, was forced to shut down its key product Yaps, an app that rewarded users for "yapping" (active posting). Founder Yu Hu announced a shift to a new model, Kaito Studio, focusing on selective marketing without mass spam. KAITO's 24-hour trading volume exceeded $64 million, with a market cap of $129 million.

Cookie Shutdown

As for Cookie DAO, the project also suffered. The COOKIE token fell 15-18% to $0.03662. The team announced the cessation of the Snaps feature, a tool for rewarding social activity. In a Cookie DAO post, they wrote: "Thanks for playing," which many interpreted as effectively shutting down key operations, as you noted. This is part of a broader trend: the entire InfoFi sector lost over 10% of its capitalization, valued at $290 million.

Broader Implications for the Crypto Community

This ban is part of X's fight against "inorganic activity." Since the start of 2026, the platform's algorithm has already been suppressing crypto content: posts with $BTC or $ETH are often hidden, while political or meme topics get boosted. For projects, this means shifting to organic growth or migrating to other platforms. Analysts predict this will clear CT of spam but reduce overall activity - timelines will become quieter, and narratives slower.