TL;DR:
- ZachXBT warned users to avoid Rain Protocol after detecting suspicious on-chain patterns in the prediction markets project valued at $8.8 billion.
- The investigator linked RAIN team wallets to the DOP and TOMI ecosystems, projects associated with controversial Israeli entrepreneur Moshe Hogeg.
- ZachXBT downgraded Kraken from S-tier to B-tier for listing low-quality tokens and flagged a lack of due diligence at the exchange.
On-chain investigator ZachXBT issued a public warning against Rain Protocol, a prediction markets project that, according to his analysis, carries a market capitalization of $8.8 billion and ranks among the top 15 crypto assets, despite having few users, limited traction, and a team with no relevant track record in the industry.
In his investigation, ZachXBT identified that wallets linked to the RAIN team share funding traces with the ecosystems Data Ownership Protocol (DOP) and TOMI, through the Gems hot wallet and several deposit addresses on centralized exchanges. As concrete evidence, he pointed to two “dust” transactions sent to the same address on October 14, 2025: one originating from a wallet tied to the RAIN deployer at 15:31:47 UTC and another, 36 seconds earlier, linked to the TOMI team multisig. The receiving address later received funds from an address previously funded by a DOP multisig.
ZachXBT Exposes the Manipulation Signals Behind RAIN
The investigator also alleged that the token’s market activity shows signs of on-chain price manipulation, with deployer addresses operating in Uniswap V3 liquidity pools while channeling transfers through the Gems hot wallet. According to DefiLlama data cited in his report, RAIN has $27.2 million locked on Arbitrum, although the entire amount corresponds to its own illiquid token.
The protocol generates roughly $1 million in annual fees, a scale far below platforms such as Kalshi or Polymarket. ZachXBT also noted that TOMI, DOP, and Sirin Labs are linked to Moshe Hogeg, an Israeli entrepreneur arrested in 2021 and flagged by police in connection with a $290 million crypto fraud scheme.
Kraken Loses Its Place on the Podium
As a direct consequence of his investigation, ZachXBT downgraded Kraken from S-tier to B-tier, citing a lack of due diligence in listing tokens he described as low quality and potentially manipulated, including M, RAIN, RIVER, and RAVE. He also criticized the exchange for failing to mention compensation for affected users following its recent security incident, in contrast with the responses from Coinbase and Bybit to similar events.
To dig deeper into manipulation schemes on centralized exchanges, ZachXBTÂ raised his reward to $100,000 for whistleblowers who can provide documents or conversation records to support his findings.
