Major cryptocurrency exchanges Binance and Bitget have initiated an investigation into the trading activity surrounding the RAVE token, following allegations by on-chain analyst ZachXBT that insiders manipulated the market, resulting in a massive short squeeze. The token's value skyrocketed by 4,500% in a single week, leading to the liquidation of over $44 million in bearish positions. Notably, nearly 90% of the token's supply was concentrated in just three wallets, and millions of tokens were transferred to exchanges before the price surge began.
ZachXBT has offered a $10,000 bounty for any information regarding the parties involved. The project, RaveDAO, claims to be a Web3 platform focused on electronic music events, offering blockchain-based ticketing and community governance, but its token's market behavior has raised suspicions. The token's price jumped from $0.30 to over $6 in a single day, reaching a market value of over $6 billion before receding.
The investigation will examine allegations of a 'bait and liquidate' scheme, where visible transfers are used to lure traders into short positions, only to withdraw the tokens and drive up the price, forcing short sellers to buy back at higher prices. RaveDAO has denied any involvement in the price manipulation, stating that the team is not responsible for the recent price action, but plans to liquidate portions of unlocked tokens when appropriate.