Binance and Bitget, two major cryptocurrency exchanges, have opened investigations into trading activity surrounding RaveDAO’s RAVE token, after onchain sleuth ZachXBT alleged insiders engineered a large short squeeze that drove the token’s rapid rise.

Crypto exchange Bitget's CEO Gracy Chen said the exchange had “started investigating” the matter, while Binance CEO Richard Teng later said publicly that the platform was also looking into the claims and would “always” do its part to examine signs of market misconduct. Another exchange, Gate, was also mentioned in ZachXBT’s investigation.

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 over $44 million in RAVE positions, most of which were bearish, getting liquidated in a single day. Those liquidations followed a 4,500% rally over the course of a week.

Still, the short squeeze highlighted the concentration of RAVE tokens within a small set of wallets. In fact, nearly 90% of its supply was in just three Gnosis Safe wallets at the time.

Investigators also flagged token transfers to exchanges shortly before the rally began. Millions of tokens were moved to exchanges before prices started surging.

RaveDAO presents itself as a Web3 project focused on electronic music events, offering blockchain-based ticketing and community governance. It traces its origins to a 2023 afterparty in Istanbul and has since hosted events across several regions. The project reported about $3 million in revenue in 2025.

That footprint contrasts with the token’s market behavior. RAVE traded below $0.50 for most of its history before surging in April. It jumped from about $0.30 to over $6 in a single day, then climbed past $27 before starting to recede.

At its peak, the token’s market value briefly exceeded $6 billion, placing it among the largest cryptocurrencies by market cap before dropping. The token is now down more than 50% from its peak and 30% over the last 24 hours.

‘Bait and liquidate’

A separate claim centers on what some describe as a “bait and liquidate” pattern. The idea is that visible transfers suggest selling pressure, drawing traders into short positions.

If those tokens are later withdrawn while prices rise, short sellers may be forced to buy back at higher prices, driving further gains for those on the other side of the trade. These claims remain unproven, but the concentration of supply suggests it’s a real possibility.

Community reports have also linked the project to figures associated with earlier crypto ventures, including ARPA and Bella Protocol, though those connections have not been independently verified. None of the individuals named in these reports has responded publicly.

RaveDAO addressed the situation in a social media thread, stating that the team is “not engaged in, nor responsible for, recent price action.”

In the thread, RaveDAO did not address specific onchain allegations, including supply concentration or the millions transferred to exchanges ahead of the pump, but confirmed it does plan to liquidate portions of unlocked tokens “when appropriate.”

RaveDAO said it was "exploring appropriate models, including price-triggered or performance-triggered locks, that tie team incentives to ecosystem growth." It stopped short of committing to any specific mechanism or timeline.

CoinDesk has reached out to RaveDAO for comments.