A new on-chain investigation has exposed the anatomy behind a billion-dollar token valuation that turned out to be nothing more than a liquidity trap. Crypto detective ZachXBT, who has 1.07 million followers on the X platform, published in-depth findings on the manipulation scheme of the $LAB (LABtrade) token project. In a thread that immediately went viral with 4,013 likes and 606 retweets, he detailed how the project’s structure was specifically designed to disadvantage retail investors.
This $LAB investigation is one of the most popular reports this week. Its publication is separate from another case recently exposed by ZachXBT, namely that of Tiffany Milanovich - an American scammer who stole $5 million from crypto exchange and hardware wallet users.
How Insiders Locked Up 95% of the Supply
At the core of these findings is the near-absolute centralization of asset ownership. Based on on-chain data, the $LAB team reportedly controls more than 95% of their total token supply. This extreme concentration of ownership was not built transparently, but through various shady loans and private OTC (over-the-counter) transactions deliberately kept away from public view.
The direct impact of these opaque practices is that the float - tokens that actually circulate freely in the market - remains unknown. On the other hand, the team also unilaterally changed the vesting schedule. This decision allowed insiders to unlock their assets at any time, while outsiders remained bound by the original rules.
A $6 Billion Valuation Built on Thin Liquidity
Armed with supply control and planned coordination with market makers, the project briefly surpassed a fully diluted valuation (FDV) of $6 billion. This figure was achieved despite their ownership structure being highly concentrated in the hands of the internal team.
Looking at this series of facts, ZachXBT cited this project as an example of an industry ailment. In his report, he called the $LAB case “representative of everything that is wrong with the current meta of retail extraction.”
The pattern they followed relies on a single scenario. The token price is pumped up, and then insiders dump their holdings onto retail buyers. Ultimately, retail investors are left holding the $LAB tokens in a thin-liquidity market - making their assets impossible to sell without causing the price to plunge further.
As reported by @zachxbt on X.
Disclaimer: This article is for informational and educational purposes only, not financial advice. Cryptocurrency assets are highly volatile and carry significant risk. Always do your own research (DYOR) and never invest more than you can afford to lose.
