On-chain detective ZachXBT has released a deep-dive investigation uncovering a manipulation scheme behind the sharp surge in the valuation of the LABtrade ($LAB) token. The investigation shows how a crypto project was driven to a fully diluted valuation (FDV) of $6 billion, or approximately Rp93 trillion, through supply manipulation and black market operations.
The most prominent fact from the findings highlights asset control. ZachXBT emphasized that the project’s controllers hold more than 95% of the total $LAB token supply. This near-total control gives them unlimited room to trigger extreme price manipulation and extract capital from retail investors.
Backchannels and Unilateral Vesting
To cover up this asset hoard, the team behind LABtrade executed concealment tactics. The investigation revealed a series of private loans and over-the-counter (OTC) transactions that were intentionally made opaque. Through these closed channels, insiders could move large amounts of assets without generating order history on public exchanges.
This practice extended to changing the rules of the game midway. The project’s controllers unilaterally altered the coin release vesting schedule without community approval. Along with this, they hid the exact circulating supply of tokens from public scrutiny and coordinated covertly with market makers.
The combination of a vesting schedule that could be changed at any time, a concealed circulating supply, and market maker intervention left ordinary buyers trading in a blind arena. They were executing transactions in a market fully controlled from behind the scenes.
Retail as Liquidity Targets
ZachXBT concluded that LABtrade is not just about the misconduct of a single project. This case represents systemic decay in the current retail token ecosystem, where a coin is issued as a tool for unethical capital extraction.
Small investors who entered after seeing the upward trend toward a Rp93 trillion valuation were unaware of their true position. They were positioned as liquidity targets for insiders. This system was built specifically to ensure money from retail buyers flows directly into the pockets of the token creators.
Once the project controllers decide to cash out their 95% token allocation through OTC doors or market maker coordination, the capital of small investors becomes the ultimate sink. Later buyers only inherit artificial assets ready to be dumped at any time. Reported by @zachxbt on X.
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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.
