Binance and Bitget, two major cryptocurrency exchanges, have opened investigations into trading activity surrounding RaveDAO’s RAVE token after alleged insiders on chain ZachXBT made a large short squeeze that fueled the token’s rapid rise.
Crypto exchange Bitget CEO Gracy Chen said the exchange had “begun to investigate” the matter, while Binance CEO Richard Teng later said publicly that the platform was also looking into the allegations and would “always” do its part to investigate signs of market wrongdoing. 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 surged earlier this week, leading to over $44 million in RAVE positions, most of which were bearish, being liquidated in a single day. These liquidations followed a 4,500% rally in one week.
Still, the short squeeze highlighted the concentration of RAVE tokens in a small set of wallets. In fact, almost 90% of its supply was in just three Gnosis Safe wallets at the time.
Investigators also flagged token transfers to exchanges shortly before the demonstration began. Millions of tokens were moved to exchanges before prices started to rise.
RaveDAO presents itself as a Web3 project focused on electronic music events, offering blockchain-based ticketing and community management. It traces its origins to an after party in 2023 in Istanbul and has since hosted events across multiple regions. The project reported about $3 million in revenue by 2025.
This footprint contrasts with the token’s market behavior. RAVE traded below $0.50 for most of its history before rising in April. It jumped from around $0.30 to over $6 in a single day, then climbed past $27 before starting to fall back.
At its peak, the token’s market capitalization briefly exceeded $6 billion, placing it among the largest cryptocurrencies by market capitalization, before declining. The token is now down more than 50% from its peak and 30% over the last 24 hours.
‘Take and liquidate’
A separate claim centers on what some describe as a “bait and cash” pattern. The idea is that visible transfers indicate selling pressure, which draws traders into short positions.
If these tokens are later withdrawn while prices rise, short sellers may be forced to buy back at higher prices, leading to further gains for those on the other side of the trade. These claims remain unproven, but the concentration of supply suggests it is a real possibility.
Community reports have also linked the project to figures associated with previous crypto ventures, including ARPA and Bella Protocol, although these 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 is “not involved in, or responsible for, recent price action.”
In the thread, RaveDAO did not address specific claims on the chain, including supply concentration or the millions transferred to exchanges in front of the pump, but confirmed that it plans to liquidate portions of unlocked tokens “when appropriate.”
RaveDAO said it was “exploring appropriate models, including price-triggered or performance-triggered locks, that tie team incentives to ecosystem growth.” It stopped committing to any specific mechanism or timeline.
CoinDesk has reached out to RaveDAO for comment.
