Core Manipulation Allegations

The $LAB token (associated with Labs Group) has faced extensive manipulation allegations throughout 2026, primarily led by on-chain investigator ZachXBT and Moonrock Capital. The core of the controversy involves a massive "pump and dump" scheme where insiders allegedly controlled over 95% of the supply, leading to a 97% price collapse from its all-time high.

Exchanges like Bitget and Gate.io have been publicly accused of ignoring these allegations due to high trading fee revenue, alleged conflicts of interest involving free token allocations, and a lack of regulatory mandates requiring them to act on third-party on-chain investigations.

Core Manipulation Allegations

The allegations against $LAB and its founder, Vova Sadkov (alias: vsadkovv), center on coordinated supply control and deceptive financial practices:

• Supply Control & Exit: ZachXBT reported that 100 million LAB tokens (~$480M), representing roughly 32.26% of the circulating supply, were withdrawn from Bitget by 10 fresh wallets in a single 12-hour window (May 11–12, 2026) just before a 65% price crash.
• Pre-Pump Positioning: Approximately 96 million LAB (~$63M) were moved to Bitget by team-linked wallets ahead of a major price surge in early May.
• Deceptive Terms: The project allegedly unilaterally extended public sale lock-ups from 3 months to 9 months and offered private OTC deals at 60–80% discounts with high-interest loan arrangements (7.5% monthly).
• Systemic Fraud: Investigators linked the project to a "Chinese CEX cartel," noting that the same market makers and multi-sig signers were involved in previous manipulation cases like RAVE, RIVER, and SIREN.

Why Bitget and Gate.io May Not Be Acting

Despite public calls to freeze funds or delist the token, Bitget and Gate.io have largely remained inactive. Research suggests several structural and financial reasons for this:

• Financial Incentives: Exchanges earn substantial trading fees from high-volatility tokens. $LAB saw peak 24-hour volumes of $147M–$340M during its most volatile periods, generating significant revenue for the platforms.
• Listing Relationships: Whistleblowers have alleged that exchanges received free tokens to maintain listings, creating a direct conflict of interest. [Note: not independently confirmed]
• Plausible Deniability: While Bitget CEO Gracy Chen stated the exchange would "investigate," critics like Moonrock Capital's Simon Dedic argue these investigations are often performative, providing no follow-up or remediation for affected users.
• Regulatory Gaps: There is currently no global regulatory mandate forcing exchanges to delist tokens based on on-chain sleuthing alone, allowing them to prioritize volume over due diligence until formal charges are filed.

Current Market Status (July 12, 2026)

The token is currently in a state of near-total collapse, having erased billions in market value.

Evidence and Public Response

• Bounty for Evidence: ZachXBT offered a $10,000 bounty for evidence including the founder's passport/ID, market maker contracts, and chat logs to further the investigation.
• Exchange Accusations: Simon Dedic (Moonrock Capital founder) publicly accused Gate.io, KuCoin, and Bitget of "condoning and supporting this obvious fraudulent behavior for short-term profits."
• Security Status: While the $LAB contract passed basic automated security checks (it is not a technical "honeypot"), the overwhelming evidence of supply manipulation and insider dumping makes it a high-risk asset. The upcoming August unlock represents a significant potential sell-pressure event.

The situation remains unresolved as exchanges have not provided public updates on their internal investigations or taken formal action to delist the asset despite the documented evidence of insider dumping.