Cryptocurrency exchanges Binance and Bitget have initiated investigations into the recent trading activity surrounding RaveDAO's RAVE token, following allegations by on-chain analyst ZachXBT that insiders may have orchestrated a large short squeeze, leading to the token's rapid appreciation. Bitget's CEO, Gracy Chen, confirmed the exchange's investigation, while Binance CEO Richard Teng also announced that his platform is looking into the matter, emphasizing the importance of examining signs of market misconduct.
ZachXBT has offered a $10,000 reward to whistleblowers who can provide evidence about the parties involved in the alleged scheme. The token's price surge resulted in over $44 million in liquidations, with nearly 90% of its supply concentrated in just three Gnosis Safe wallets at the time. Furthermore, investigators have flagged significant token transfers to exchanges shortly before the rally began, with millions of tokens being moved to exchanges before the price increase.
RaveDAO, a Web3 project focused on electronic music events, has reported $3 million in revenue in 2025, but its token's market behavior has raised concerns. The token's price jumped from $0.30 to over $6 in a single day, reaching a market value of over $6 billion before receding. The token is now down over 50% from its peak and 30% over the last 24 hours.
Some have described the situation as a 'bait and liquidate' pattern, where visible transfers suggest selling pressure, drawing traders into short positions, only to have those tokens withdrawn later, forcing short sellers to buy back at higher prices. 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.