Binance and Bitget, two major cryptocurrency exchanges, have opened investigations into trading activities around RaveDAO’s RAVE token, after on-chain detective ZachXBT alleged that insiders engineered a large short squeeze that resulted in the token’s rapid rise.
Gracy Chen, CEO of cryptocurrency exchange Bitget, said the exchange had “started investigating” the matter, while Binance CEO Richard Teng later said publicly that the platform was also looking into the allegations and would “always” do its part to look into signs of market misconduct. Another exchange, Gate, was also mentioned in ZachXBT’s survey.
ZachXBT has also personally offered a $10,000 bounty to whistleblowers who come forward privately to share evidence about the parties involved.
The little-known project rallied earlier in the week, leading to the liquidation of more than $44 million in RAVE positions, most of which were bearish, in a single day. These selloffs follow a 4,500% rally in one week.
Nonetheless, the short squeeze highlighted the concentration of RAVE tokens in a small set of wallets. In fact, almost 90% of its supply was in just three Gnosis Safe wallets at the time.
Investigators also reported transfers of tokens to exchanges shortly before the rally began. Millions of tokens were moved to exchanges before prices started to rise.
RaveDAO presents itself as a Web3 project focused on electronic music events, offering blockchain-based ticketing and community governance. It has its origins in an afterparty held in 2023 in Istanbul and has since hosted events in several regions. The project brought in approximately $3 million in revenue in 2025.
This footprint contrasts with the behavior of the token market. RAVE traded below $0.50 for most of its history before surging in April. It rose from around $0.30 to over $6 in a single day, then rose above $27 before starting to pull back.
At its peak, the token’s market value briefly exceeded $6 billion, placing it among the largest cryptocurrencies by market capitalization before falling. The token is now down more than 50% from its peak and 30% in the last 24 hours.
“Bait and liquidate”
Another claim focuses on what some describe as a “bait and liquidate” trend. The idea is that visible shifts suggest selling pressure, drawing traders into short positions.
If these tokens are then withdrawn as prices rise, short sellers could be forced to repurchase at higher prices, resulting in additional gains for those on the other side of the trade. These claims remain to be proven, but the concentration of supply suggests it is a real possibility.
Community reports have also linked the project to figures associated with previous crypto projects including ARPA and Bella Protocol, although these links have not been independently verified. None of the people named in these reports have responded publicly.
RaveDAO addressed the situation in a social media thread, stating that the team is “not engaged or responsible for recent price action.”
In the thread, RaveDAO did not respond to the chain’s specific allegations, including supply concentration or millions transferred to exchanges ahead of the pump, but confirmed that it plans to liquidate portions of the unlocked tokens “if applicable.”
RaveDAO said it was “exploring suitable models, including price- or performance-triggered locks, that tie team incentives to ecosystem growth.” He did not commit to a specific mechanism or timetable.
CoinDesk has contacted RaveDAO for comment.
