Major cryptocurrency exchanges Binance and Bitget have initiated an investigation into the recent trading activity surrounding RaveDAO's RAVE token, following allegations by on-chain analyst ZachXBT that insiders orchestrated a substantial short squeeze, resulting in the token's rapid appreciation. 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 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 can provide evidence about the parties involved. The relatively unknown project experienced a significant rally, resulting in over $44 million in RAVE positions being liquidated in a single day, with the majority of these positions being bearish.
The short squeeze highlighted the concentrated ownership of RAVE tokens, with nearly 90% of the supply held in just three Gnosis Safe wallets at the time. Investigators also noted that millions of tokens were transferred to exchanges shortly before the price surge began. RaveDAO, a Web3 project focused on electronic music events, offers blockchain-based ticketing and community governance. Despite its relatively small footprint, with $3 million in revenue reported in 2025, the token's market behavior has been notable.
RAVE traded below $0.50 for most of its history before surging in April, jumping from around $0.30 to over $6 in a single day, and eventually reaching a peak of over $27. 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 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If those tokens are later withdrawn while prices rise, short sellers may be forced to buy back at higher prices, driving further gains for those on the other side of the trade.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 it's 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, but did not address specific on-chain allegations.
The project confirmed plans to liquidate portions of unlocked tokens 'when appropriate' and is exploring models that tie team incentives to ecosystem growth.