Major cryptocurrency exchanges Binance and Bitget have initiated investigations into the recent trading activity surrounding the RAVE token, which is part of the RaveDAO project, a Web3 platform focused on electronic music events. This comes after an on-chain analysis by ZachXBT suggested that insiders may have manipulated the market, leading to a significant short squeeze that drove the token's price up by 4,500% over the course of a week.
The token's price surge led to over $44 million in liquidations, primarily from bearish positions, in a single day. Notably, nearly 90% of RAVE's supply was concentrated in just three Gnosis Safe wallets at the time, and millions of tokens were transferred to exchanges shortly before the price began to rise. RaveDAO, which offers blockchain-based ticketing and community governance, has stated that it is not involved in the recent price movements but plans to explore models that tie team incentives to ecosystem growth. The project has faced allegations of a 'bait and liquidate' strategy, where the visible transfer of tokens is used to lure short sellers into the market, only to withdraw the tokens later, forcing short sellers to buy back at higher prices and driving further price gains.