Following allegations of a deliberately engineered short squeeze, major cryptocurrency exchanges Binance and Bitget have initiated investigations into the trading activity surrounding the RAVE token, which is associated with the RaveDAO project. The claims, made by on-chain analyst ZachXBT, suggest that insiders manipulated the market, resulting in a significant price surge. In response, Bitget's CEO, Gracy Chen, confirmed that the exchange has begun investigating the matter, while Binance's CEO, Richard Teng, stated that the platform is also examining the allegations and will take action if signs of market misconduct are found.
Another exchange, Gate, was mentioned in ZachXBT's investigation as well. To encourage whistleblowers to come forward with evidence, ZachXBT has offered a $10,000 bounty. The RAVE token's price surged by 4,500% over the course of a week, resulting in the liquidation of over $44 million in bearish positions.
Notably, nearly 90% of the token's supply was concentrated in just three Gnosis Safe wallets at the time, and millions of tokens were transferred to exchanges shortly before the price began to rise. RaveDAO, which describes itself as a Web3 project focused on electronic music events, has reported revenue of approximately $3 million in 2025. However, the token's market behavior has been highly volatile, with its price jumping from $0.30 to over $6 in a single day before receding.
The token's market value briefly exceeded $6 billion at its peak, placing it among the largest cryptocurrencies by market capitalization. The token has since declined by more than 50% from its peak and 30% over the last 24 hours.
Some have suggested that the price surge may be part of a 'bait and liquidate' scheme, where visible transfers are used to create the illusion of 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 If those tokens are later withdrawn while prices rise, short sellers may be forced to buy back at higher prices, driving further gains for those on the other side of the trade. While these claims remain unproven, the concentration of supply suggests that it is a possibility.
Community reports have linked the project to individuals associated with earlier crypto ventures, although these connections have not been independently verified. RaveDAO has addressed the situation, 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 a specific mechanism or timeline.