Binance and Bitget, two major cryptocurrency exchanges, have opened investigations into trading activity around RaveDAO’s RAVE token, after on-chain sleuth ZachXBT alleged insiders engineered a large short squeeze that fueled the token’s rapid rise.
Gracy Chen, CEO of cryptocurrency exchange Bitget, said the exchange had “started investigating” the matter, while Binance CEO Richard Teng later said publicly that the platform was also investigating the claims and would “always” do its part to examine signs of market misconduct. Another exchange, Gate, was also mentioned in ZachXBT’s investigation.
ZachXBT has also personally offered a $10,000 reward to whistleblowers who come forward privately to share evidence about the parties involved.
The little-known project rallied earlier in the week, leading to more than $44 million in RAVE positions being liquidated in a single day, the majority of which were bearish. Those selloffs followed a 4,500% rally over the course of a week.
Still, the brief squeeze highlighted the concentration of RAVE tokens within a small set of wallets. In fact, almost 90% of its supply was in just three Gnosis Safe wallets at the time.
The researchers also noted transfers of tokens to exchanges shortly before the rally began. Millions of tokens were moved to exchanges before prices began to rise.
RaveDAO presents itself as a Web3 project focused on electronic music events, offering blockchain-based ticketing and community governance. Its origins date back to a 2023 after-party in Istanbul and it has since hosted events in various regions. The project reported around $3 million in revenue in 2025.
This footprint contrasts with the behavior of the token market. RAVE traded below $0.50 for most of its history before rising in April. It jumped from about $0.30 to over $6 in a single day, then rose over $27 before starting to pull back.
At its peak, the token’s market value briefly surpassed $6 billion, placing it among the largest cryptocurrencies by market capitalization before falling. The token is now down more than 50% from its peak and 30% in the last 24 hours.
‘Bait and liquidation’
A separate claim focuses on what some describe as a “bait and liquidate” pattern. The idea is that visible transfers suggest selling pressure, leading traders to short positions.
If those tokens are later withdrawn as prices rise, short sellers may be forced to buy back at higher prices, leading to larger profits for those on the other side of the trade. These claims are not yet proven, but the concentration of supply suggests it is a real possibility.
Community reports have also linked the project to figures associated with previous crypto companies, including ARPA and Bella Protocol, although those connections have not been independently verified. None of the people named in these reports have responded publicly.
RaveDAO addressed the situation in a social media thread, stating that the team “has no involvement in nor is it responsible for the recent price action.”
In the thread, RaveDAO did not address specific on-chain allegations, including supply concentration or millions transferred to exchanges before the pump, but confirmed that it plans to liquidate portions of unlocked tokens “when appropriate.”
RaveDAO said it was “exploring appropriate models, including price- or performance-triggered locks, that link team incentives to ecosystem growth.” He stopped short of committing to any specific mechanism or schedule.
CoinDesk has reached out to RaveDAO for comment.
