Major cryptocurrency exchanges Binance and Bitget have initiated investigations into the recent trading activity surrounding RaveDAO's RAVE token. This move comes after on-chain analyst ZachXBT alleged that insiders orchestrated a significant short squeeze, resulting in the token's 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.
Furthermore, ZachXBT has offered a $10,000 bounty to whistleblowers who can provide evidence about the parties involved. The little-known project experienced a significant rally, leading to 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 its supply controlled by just three Gnosis Safe wallets at the time.
Investigators also flagged the transfer of millions of tokens to exchanges shortly before the rally began. RaveDAO, a Web3 project focused on electronic music events, has reported $3 million in revenue in 2025. However, the token's market behavior has been highly volatile, surging from $0.30 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 before dropping. The token has since declined by 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 are used to create 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If those tokens are later withdrawn while prices rise, short sellers may be forced to buy back at higher prices, driving further gains for those on the other side of the trade.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 it's a real possibility.
Community reports have linked the project to figures associated with earlier crypto ventures, including ARPA and Bella Protocol, though those 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 any specific mechanism or timeline.