AI Cryptos Show Mixed Reactions to Imposed Restrictions on Grok

TheNewsCryptoPublished on 2026-01-12Last updated on 2026-01-12

Abstract

Grok, the AI tool integrated into X, is facing global scrutiny and restrictions due to its role in generating non-consensual offensive deepfakes. Countries including Indonesia, Malaysia, the UK, and India have taken action, ranging from blocking the platform to issuing warnings and demanding content removal. This controversy has influenced the AI cryptocurrency market, resulting in mixed reactions. Some top AI cryptos like TAO, NEAR, and ICP saw declines of over 1-2%, while others such as IP, GLM, and KAITO posted gains of up to 21%. Broader economic factors, including US unemployment and upcoming inflation data, also contribute to the sector's volatility.

Grok remains surrounded by the controversy over the creation of offensive deepfakes. Indonesia and Malaysia have taken stringent action, while the UK has threatened action and India has rung an alarm over it. The AI segment, in general, has taken note of this, and reactions are somewhat reflecting on AI cryptos.

Restrictions on Grok

Grok, the built-in AI tool of X, is under the scanner across the world, with a few countries reportedly taking strict actions against the bot. It all began with Grok creating offensive deepfakes of women without their consent – simply on the prompt typed by users. Backlash was quick, and multiple countries responded to it first-hand.

Malaysia and Indonesia have reportedly blocked Grok, citing the failure of the platform to curb non-consentual offensive deepfakes. The UK has issued a warning on similar lines while highlighting that the platform was not doing enough to keep its users safe digitally.

In India, the Ministry of Electronics & Information Technology, or MeitY, has ordered the platform to remove such content and submit a report within 72 hours. Authorities have also underlined the misuse of the tool by users while calling it the platform’s failure in ensuring preventive mechanisms.

Reaction of AI Cryptos

Some of the top AI cryptos are down at the time of writing this article. This includes TAO, NEAR, and ICP. They have shed approximately 1.10%, 1.71%, and 2.35% over the last 24 hours, respectively. These AI cryptos are now trading at $281.58, $1.67, and $3.13, applicable in the same order.

However, there are AI cryptos that have gained substantial value during the same timeline. For instance, IP is up by 21.32% and is exchanging hands at $2.57. GLM has soared by 3.26% to $0.3020. And, KAITO has surged by 7.99% to $0.6359.

Other Factors Influencing AI Cryptos

Other factors, in addition to Grok’s controversy, that could have possibly affected AI cryptos are the recent unemployment data and the anticipated US inflation data. The unemployment data shows a drop to 4.4% in December 2025, but it is paired with sluggish job growth throughout 2025.

Data for US inflation is expected to be announced soon. It was last noted to be 2.68% as on November 30, 2025, down from 3.01% as on September 30, 2025. Data for October 2025 was not reported due to the government shutdown. It remains to be seen where the AI crypto segment moves in the days to come, considering the Trump-Powell feud just got bigger.

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Related Questions

QWhat is the main reason for the restrictions imposed on Grok by countries like Indonesia and Malaysia?

AThe main reason is Grok's failure to curb non-consensual offensive deepfakes, particularly of women, created based on user prompts.

QWhich AI cryptocurrencies have lost value in the last 24 hours according to the article?

ATAO, NEAR, and ICP have lost value, shedding approximately 1.10%, 1.71%, and 2.35% respectively.

QName two AI cryptocurrencies that have gained substantial value in the last 24 hours.

AIP (up 21.32%) and KAITO (up 7.99%) have gained substantial value.

QWhat action has India's MeitY taken regarding the Grok platform?

AIndia's Ministry of Electronics & Information Technology (MeitY) has ordered the platform to remove offensive content and submit a compliance report within 72 hours.

QBesides the Grok controversy, what other factors are mentioned as potentially influencing AI cryptos?

AOther factors include recent unemployment data showing a drop to 4.4% in December 2025 with sluggish job growth, and the anticipated US inflation data announcement.

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