A newly launched Layer 1 blockchain project called $KTA saw the price of its token nosedive by almost 26% in just one day, following some quite serious claims that called into question the very authenticity of its testnet. KTA’s situation has sent investor confidence into quite the tailspin and, even though project backers are actively pushing the narrative that all is well, a pretty decent-sized wave of skepticism now seems to cover social media and the crypto communities. Doubt has suddenly descended on $KTA, which had only quite recently received a fair amount of positive attention for its ambitious plans and its not-inconsequential recent fundraising. The supporters of $KTA, in what is effectively its own PR campaign, paint the appearance of doubt as, um, dubious. And, really, with the way they tell it, who wouldn’t be wild about the plans $KTA is supposedly making for the $KTA blockchain? They aren’t just wild; they are, as promised, transparent in the way they paint a picture of the project. Allegations of a “Fake” Testnet Stir Concern The catalyst that first caused the price to drop was an analyst’s claim that the KTA testnet explorer—a tool for seeing what’s happening in a network—was being used to mislead people into thinking the KTA network was doing something. According to the allegations, the testnet explorer was showing a lot of transactions that, by the explorers’ own measures, weren’t real. And this was serious for the KTA network, because if, as the allegations suggested, it was using the testnet explorer to run a network that wasn’t doing any real KTA transactions, then KTA tokens were going to be virtually worthless. Such allegations are especially harmful in the cryptocurrency sector, where a working test network and a live network are basic standards used to judge a project’s worth. Many investors see the test network as a crucial proving ground for a project’s technical chops before it launches the main network and its tokens become more valuable. Even though there were claims to the contrary, project supporters pushed back strongly. They emphasized that the development team is now publicly known and, thus, accountable. They also pointed to the $17 million raise that the project has documented through SEC filings as more than enough evidence that institutional investors have properly vetted and backed the effort. For these folks, the development team’s public presence, the project’s SEC-registered funding, and the path from funding to project operation are clean as a whistle. Onchain Analyst Zachxbt Highlights Governance Red Flags Onchain analyst zachxbt has questioned the way the token’s supply is generated and how it is disbursed, and he’s not the only one. Shill capital does not speak well for a project’s governance, as it directly speaks to the project’s. Zachxbt’s remarks mirrored a wider doubt in the crypto analyst fraternity about the viability of projects whose marketing depends largely on engaging with influencers, as opposed to getting the kind of engagement that builders usually do. He stated, “When the most vociferous advocates (shills) for a project come not from its builders but from questionable KOLs, it usually means the project is underperforming in the tech department.” when the biggest shills for a project come from sketchy KOLs (Nekoz, etc) vs actual builders for a project it typically means the tech is underwhelming. nonetheless the supply control by them has so far been impressive L1s w/ token preproduct + large tax at launch for a… pic.twitter.com/6O0z5sW9ag — ZachXBT (@zachxbt) June 9, 2025 The analyst criticized the tokenomics model too, describing it as a Layer 1 project with a pre-product token and a large tax imposed at launch, which often leads to artificial price pumping followed by sharp corrections. This observation resonates with some investors who suspect the current hype may not be sustainable without real technical progress. Community Divided as Price Continues to Slide These disclosures have split the community of $KTA. Some holders maintain optimism, trusting in the team’s transparency and the potential for future development milestones that could prove the project’s legitimacy. Others have started to cut their losses, concerned about holding tokens that they see as tied to an overhyped or inadequately tested network. I am likely the first person ever to go on the Keeta testnet. TLDR it’s completely fake. The explorer is a Vercel vibe coded page posting fake transaction data. Swaps don't work. Keeta CTO – “There's a lot of network functionality that underlies the UI of this little demo but… pic.twitter.com/3T7NvU6vnk — MRG (@thespacecatjr) June 9, 2025 Market reaction has been swift and severe, with the token dropping nearly 26% in a single day—reflecting the intensity of concerns and the difficulty in dispelling doubts once they take hold in the crypto market. The episode highlights the risks associated with investing in early-stage Layer 1 projects, where technical proof points like functioning testnets are critical but sometimes overlooked in the rush of marketing and fundraising. The situation is still unfolding, and the team at $KTA is still trying to remain calm and focused. It’s likely that they’re feeling pressure and are under some duress to achieve what is very clearly a must-win outcome. That is, they need to produce evidence that is not only clear and convincing but also verifiably good news. So far, it seems they’ve come up with some basic demonstration of network functionality. The world of blockchain projects is constantly changing, but the trust of investors always comes down to two basic elements: proven technology and transparency. The saga of $KTA is a powerful reminder of the importance of these two elements. Disclosure: This is not trading or investment advice. Always do your research before buying any cryptocurrency or investing in any services. Follow us on Twitter @nulltxnews to stay updated with the latest Crypto, NFT, AI, Cybersecurity, Distributed Computing, and Metaverse news !
