Following allegations of a large-scale short squeeze orchestrated by insiders, major cryptocurrency exchanges Binance and Bitget have initiated investigations into the trading activity surrounding RaveDAO's RAVE token. The claims, made by on-chain analyst ZachXBT, suggest that the token's rapid price increase was engineered by those with access to inside information.
In response to the allegations, Bitget's CEO, Gracy Chen, confirmed that the exchange had begun investigating the matter, while Binance's CEO, Richard Teng, stated that the platform would examine signs of market misconduct. ZachXBT has offered a $10,000 bounty for any information about the parties involved.
The RAVE token's price surged by 4,500% over the course of a week, resulting in the liquidation of over $44 million in short positions. However, the token's price has since dropped by more than 50% from its peak. The investigation has highlighted the concentration of RAVE tokens within a small number of wallets, with nearly 90% of the supply held in just three Gnosis Safe wallets at the time of the price surge.
Additionally, millions of tokens were transferred to exchanges shortly before the rally began, further fueling allegations of a manipulated market. RaveDAO, a Web3 project focused on electronic music events, has denied any involvement in the recent price action, stating that the team is 'not engaged in, nor responsible for, recent price action.' The project has also announced plans to explore 'appropriate models' to tie team incentives to ecosystem growth, but has not committed to any specific mechanism or timeline.