Binance and Bitget Probe Alleged Rave Token Market Manipulation After 90% Crash

Crypto Exchanges Investigate Alleged Rave Token Manipulation

Binance and Bitget have launched investigations into claims of market manipulation surrounding RaveDAO’s token following a dramatic 90% crash over the weekend. RaveDAO, a digital cooperative organizing electronic dance parties, has faced scrutiny over its rapid rise and sudden collapse.

RaveDAO’s Token Soars, Then Plummets

RaveDAO, which describes itself as a “community-driven global rave powerhouse,” has been active since late 2023. The group organizes afterparties at crypto conferences and builds “community-raised local chapters,” according to its website.

In early April, RaveDAO’s token began an unprecedented surge without a clear catalyst. By April 18, the token had gained 7,000%, briefly ranking as the 20th-largest cryptocurrency. Less than two days later, it crashed spectacularly, shedding most of its $5 billion market value in hours.

Questions Surround RaveDAO’s Extreme Volatility

Critics are questioning how the previously niche project achieved such a massive valuation so quickly and what triggered its extreme crash, even by crypto market standards. RaveDAO has not responded to requests for comment.

Pattern of Alleged Manipulation in Crypto Markets

RaveDAO’s rise and fall coincide with growing concerns over alleged market manipulation in the crypto space. In recent months, dozens of newly launched tokens have surged to multi-billion-dollar valuations before collapsing just as rapidly.

These tokens often follow a similar pattern: a small number of wallets control the majority of the supply, leaving only a fraction available for trading. The rest is locked in wallets controlled by the token’s creators. Before the surge, these tokens are frequently listed on major centralized exchanges like Binance and Bitget, which do not publicly disclose trading data.

ZachXBT Flags Alleged Pump-and-Dump Scheme

According to ZachXBT, a pseudonymous crypto investigator known for exposing misconduct, the alleged Rave token pump-and-dump originated from three exchanges: Bitget, Binance, and Gate.

“We cannot allow this blatant market manipulation by insiders controlling 90% RAVE support to further extract from retail investors.” — ZachXBT, April 18

On the same day, Binance CEO Richard Teng and Bitget CEO Gracy Chen announced investigations into the alleged manipulation on their platforms.

“We will always do our part to investigate all market misconduct.” — Richard Teng, Binance CEO

Gate did not respond to requests for comment.

Onchain Data Reveals Concentrated Token Supply

Onchain records show that 75% of the entire Rave token supply is held in a single wallet controlled by the RaveDAO team. Two additional wallets linked to the main RaveDAO wallet hold around 10% of the supply, meaning 85% of the token’s total supply was inaccessible for trading.

This concentration of tokens in a few wallets allows large buys and sells to drastically move the price. Critics argue this setup contradicts the decentralized autonomous organization (DAO) model, which is supposed to operate without central leadership and distribute governance tokens to members for voting on proposals.