Following allegations of insider-orchestrated price manipulation, major cryptocurrency exchanges Binance and Bitget have initiated investigations into the trading activities surrounding RaveDAO's RAVE token. The probe comes after on-chain analyst ZachXBT claimed that insiders engineered a large 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 CEO Richard Teng stated that the platform is also looking into the claims and will examine signs of market misconduct. Another exchange, Gate, was also implicated in ZachXBT's investigation.
A $10,000 bounty has been offered to whistleblowers who can provide evidence about the parties involved. The little-known project saw a significant rally, resulting in 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 just three Gnosis Safe wallets. Investigators also flagged token transfers to exchanges shortly before the rally began, with millions of tokens being moved to exchanges before prices started surging. RaveDAO, a Web3 project focused on electronic music events, has hosted events across several regions and reported $3 million in revenue in 2025. However, the token's market behavior has been contrasting, with RAVE trading below $0.50 for most of its history before surging in April.
The token's market value briefly exceeded $6 billion before dropping, and it is now down more than 50% from its peak and 30% over the last 24 hours. Claims of a 'bait and liquidate' pattern have also emerged, suggesting that visible transfers may be used to lure traders into short positions, only to withdraw the tokens later and drive prices up, 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, but the project's connections to earlier crypto ventures have raised concerns. The team has confirmed plans to liquidate portions of unlocked tokens 'when appropriate' and is exploring models that tie team incentives to ecosystem growth.