Following allegations of a potential insider-orchestrated rally, major cryptocurrency exchanges Binance and Bitget have initiated investigations into the recent trading activity surrounding RaveDAO's RAVE token. The claims, brought to light by on-chain analyst ZachXBT, suggest that insiders may have engineered a large short squeeze, resulting in the token's rapid price increase.
In response to the allegations, Bitget's CEO, Gracy Chen, confirmed that the exchange has started investigating the matter, while Binance CEO Richard Teng stated that the platform is also examining the claims and will take necessary actions to address any signs of market misconduct. Another exchange, Gate, was also implicated in ZachXBT's investigation. To encourage whistleblowers to come forward, ZachXBT has offered a $10,000 bounty for individuals who can provide evidence about the parties involved.
The RAVE token's price surge led to the liquidation of over $44 million in bearish positions, with the token's value increasing by 4,500% over the course of a week. However, the short squeeze also 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. Furthermore, investigators have flagged large-scale token transfers to exchanges shortly before the price surge began, with millions of tokens being moved to exchanges before the rally started.
RaveDAO, a Web3 project focused on electronic music events, has reported revenue of around $3 million in 2025 and has hosted events across several regions. Despite its relatively small footprint, the token's market behavior has been highly volatile, with its value surging from below $0.50 to over $6 in a single day before receding. At its peak, the token's market value briefly exceeded $6 billion, placing it among the largest cryptocurrencies by market capitalization.
The token has since dropped by over 50% from its peak and 30% over the last 24 hours. Some have alleged a 'bait and liquidate' pattern, where visible transfers are used to create selling pressure, drawing traders into short positions, which are then forced to buy back at higher prices, driving further gains for those on the other side of the trade.
While these claims remain unproven, the concentration of supply suggests that this could be a real possibility. RaveDAO has addressed the situation in a social media thread, stating that the team is not responsible for the recent price action and plans to liquidate portions of unlocked tokens when appropriate.
The project is exploring models that tie team incentives to ecosystem growth but has not committed to any specific mechanism or timeline.