Cryptocurrency exchanges Binance and Bitget have initiated investigations into the trading activities surrounding RaveDAO's RAVE token, following allegations by on-chain analyst ZachXBT that insiders orchestrated a large short squeeze, resulting in the token's rapid appreciation. Bitget's CEO, Gracy Chen, confirmed the exchange's investigation, while Binance's CEO, Richard Teng, stated that the platform is 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 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 held in three Gnosis Safe wallets at the time.
Investigators also noted that millions of tokens were transferred to exchanges shortly before the rally began. RaveDAO, a Web3 project focused on electronic music events, has hosted several events across various regions since its inception in 2023 and reported $3 million in revenue in 2025. However, the token's market behavior has been at odds with its footprint, trading below $0.50 for most of its history before surging in April. The token's price jumped from approximately $0.30 to over $6 in a single day, then climbed past $27 before starting to decline.
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 is now down 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 suggest selling pressure, drawing traders into short positions, and later withdrawing tokens while prices rise, forcing short sellers to buy back at higher prices. Community reports have linked the project to figures 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 any specific mechanism or timeline.