ZachXBT warned that the recently trending $LAB token is showing signs of insider trading. He claims the project team uses $LAB centralized listings to sway the price.
The $LAB project promised new platforms for multi-chain trading, recently introducing prediction markets as well. $LAB native tokens launched in late 2025 and traded sideways for months.
In the past week, $LAB broke out of its usual range below $1 and rose to new all-time highs above $4.65.
$LAB lined up among trending tokens, with over 537% in weekly gains. The project has not made any new announcements, so the rapid expansion is viewed with suspicion.
ZachXBT suspects insider trading
Unlike other recent tokens, $LAB is widely distributed to centralized exchanges. This means the asset’s activity is less transparent. According to Bubblemaps, the ownership structure suggests that exchange wallets hold a significant part of the $LAB supply.
Researchers have tracked some known wallets, linking them to the $LAB founder Vova Sadkov.
On-chain researchers also revealed that team wallets sent funds to exchanges ahead of the most recent pump. Moving $LAB has prepared exchanges for increased market maker activity. Since $LAB is allegedly heavily controlled by team members, the token managed to climb with no significant sell-offs to date.
ZachXBT noted he has tried to reach out to Sadkov, but has not received replies. $LAB is only one of the recently pumping tokens, which show signs of deliberate trading and price manipulation.
Since organic token and altcoin trading is much slower, ZachXBT warns of tokens with a controlled supply, aiming to draw in new investors and cause losses or liquidations.
Previously, ZachXBT has shed light on tokens with extraordinary rallies. The investigation into the $RAVE pump caused the token to crash.
ZachXBT also reached out to Bitget to investigate the $RAVE pump and the techniques used to hurt retail traders.
Is $LAB a sustainable token?
The $LAB project claimed its goal was to create a trading ecosystem that is not focused on extracting fees and value.
$LAB depends on its futures market, with the bulk of open interest on Binance and Bitget. In the past week, $LAB open interest rose to an all-time high above $163M, of which $89M were concentrated on Binance.
$LAB is not represented on Hyperliquid and depends on a small selection of exchanges for its liquidity. Over 74% of the $LAB open interest was in short positions, suggesting the recent rally was an attempted short squeeze.
The risk of market manipulation lies in deliberately observing and liquidating short positions. In general, traders were reluctant to short $LAB, as similar tokens have proven risky. However, new short positions were opened as the token broke out to all-time highs.
A similar wave of liquidations is possible for long positions if they expand their share of open interest. The crypto market has been receptive to recently trending new tokens, but derivative trading has turned extremely risky.
Similar new tokens include MYSTERY, which, according to BubbleMaps, had 90% of its supply sniped.
Currently, $LAB is held in whale wallets and only has limited DEX liquidity pairs. Bitget is one of the biggest holders, with $1.2B in $LAB tokens that can be potentially unlocked. Additionally, up to 99% of tokens may be held by insiders or market makers.
