Major cryptocurrency exchanges Binance and Bitget have initiated investigations into the recent trading activity surrounding the RAVE token, following allegations by on-chain analyst ZachXBT that insiders orchestrated a significant short squeeze, resulting in a rapid price increase. Bitget's CEO, Gracy Chen, confirmed that the exchange has started investigating the matter, while Binance's CEO, Richard Teng, stated that the platform is also examining the claims and will always investigate signs of market misconduct.
Another exchange, Gate, was also implicated in ZachXBT's investigation. ZachXBT has offered a $10,000 bounty to whistleblowers who come forward with evidence about the parties involved.
The little-known project experienced a significant rally, resulting in over $44 million in RAVE positions being liquidated in a single day, with most of these positions being bearish. The short squeeze highlighted the concentration of RAVE tokens within a small set of wallets, with nearly 90% of the supply held in just three Gnosis Safe wallets at the time.
Investigators also flagged token transfers to exchanges shortly before the rally began, with millions of tokens being moved to exchanges before prices started surging. RaveDAO, a Web3 project focused on electronic music events, has hosted events across several regions and reported $3 million in revenue in 2025.
However, the token's market behavior has been contrasting, with RAVE trading below $0.50 for most of its history before surging in April. The token jumped from about $0.30 to over $6 in a single day, then climbed past $27 before starting to recede. At its peak, the token's market value briefly exceeded $6 billion, placing it among the largest cryptocurrencies by market cap before dropping.
The token is now down more than 50% from its peak and 30% over the last 24 hours. A separate claim suggests a 'bait and liquidate' pattern, where visible transfers suggest selling pressure, drawing traders into short positions.
If those tokens are later withdrawn while prices rise, short sellers may be forced to buy back at higher prices, driving further gains for those on the other side of the trade. Community reports have linked the project to figures associated with earlier crypto ventures, although those connections have not been independently verified.
RaveDAO addressed the situation in a social media thread, stating that the team is not engaged in, nor responsible for, the recent price action. The team confirmed plans to liquidate portions of unlocked tokens 'when appropriate' and is exploring models that tie team incentives to ecosystem growth.