With a wave of suspicious on-chain transactions connected to Bitget, the crypto market is finding itself once again faced with accusations of lack of transparency and practices by centralized exchanges.
Massive 500 million withdrawn from CEXs, abundant discussions about the potential “Price Manipulation” on Centralized platforms have reemerged.
ZachXBT Dives Deeper into $LAB Token Scandal: Offers Bounty Following Market Manipulation Allegations
Central to the controversy are allegations of collusion, opaque business practices and what some observers now call a Chinese CEX cartel dynamic at play.
Another Under-Collateralised Protocol at A Glance
Blockchain analytics firm Lookonchain revealed the incident after noticing a strange pattern of transactions In their analysis, they found that 10 newly created wallets withdrew a total of 100 million LAB tokens from Bitget in just over 12 hours.
That movement is big. This withdrawn volume makes up approximately 32.26% of LAB’s total circulating supply, a sufficiently large amount to be transferred over that short period of time, particularly through undeveloped wallets without previous transactions history.
The valuation intensifies the significance. The tokens were worth around $480.33 million at the time of going offline, making this one of the largest large-scale single-exchange token movements over recent months.
Ten fresh wallets withdrew 100M $LAB($480.33M) from #Bitget over the past 12 hours, 32.26% of the circulating supply. pic.twitter.com/c8ABgvBJ8R
— Lookonchain (@lookonchain) May 12, 2026
ZachXBT Makes Serious Allegations Against Bitget
These transactions first came to light shortly after on-chain investigator ZachXBT publicly criticized Bitget and its top brass. He said exchange executive Shawn Liu was allowing “shady” stuff to go on behind the scenes on the platform in a pointed statement.
Going on to describe Bitget and its behavior within what ZachXBT described as a “Chinese CEX cartel,” which includes certain centralized exchanges working together typically to maximize profit without regard for transparency or their users’ interests.
He said those are the kinds of entities that have been operating for years with few checks, reaping income from market operations without real oversight. His comments highlight a mounting frustration among parts of the crypto community, especially those pushing for greater accountability at centralized trading venues.
Shawn Liu is the Bitget big boss who allows these scams to operate behind the scenes while Gracy Chen is only the face of it.
The Chinese CEX cartel has gone unchallenged for years and doesn’t care as long as they benefit from the activity.
I think it is almost time to…
— ZachXBT (@zachxbt) May 12, 2026
Coincidence Or Some Fugazi Timing with Market Consolidation
This makes the timing of the withdrawals a juicy subplot. These were all conducted while LAB was stuck in between tight consolidation as it did not show any early signs of a breakout.
On-chain observers had noticed suspicious wallet activity, with hints of developments lurking beneath the surface, even before the withdrawal. Such an abrupt removal of a whole lot of provide finally really seems to corroborate those suspicions.
Shortly after, there was a violent spike in LAB that then promptly hit all time highs at $6.6. The rapid surge in price has increased speculation that the withdrawals could have been an effort to position coordinated activity ahead of the breakout. Even though there is little explicit proof of intent, the pattern, bond price going sideways, sizable withdrawals and then an explosive move upward in clustering price, casts significant doubt on whether or not this market move was for real.
Market Impacts On LAB And Supply Concentration
More than 32% of the awake LAB has been withdrawn from circulation, and this is already influencing market dynamics. Taking such a large amount of tokens out of exchange liquidity can significantly decrease selling pressure and increase volatility in price.
In this case, the lower token supply on the exchange probably helped to push up its price sharply afterwards. A decrease in supply equals a larger influence on price, even with moderate buying pressure.
This dynamic creates a positive feedback loop: as prices go up, more buyers want in, which further raises prices. Still, by their nature, not a large number of wallets can control the supply, which creates risk because if these holders decide to liquidate prices drop sharply. LAB reached a peak of $6.6, and has an FDV of ~$3 billion today, an incredible number in light of the events that led to it recently.
Increased Transparency Concerns about Centralized Controlled Exchanges
This event goes beyond just one token or platform, as it really underscores the problem with how centralized exchanges operate and lack of transparency. Centralized exchanges tend to be more opaque, compared to decentralized platforms where transactions and liquidity are entirely on-chain.
Internal order books (2nd layer CEXs), custody & wallet management practices are usually obfuscated from users. It allows big moves to happen without immediate reason. Even if not all such activity is inherently ill-intentioned, lack of clarity can erode trust, especially when matched with atypical market behavior.The reference to a “cartel” from ZachXBT is indicative of an increased belief among some players in the crypto market that exchanges may collude in ways they do not fully disclose publicly.
Q&A Market Side: What is Still in Play
As of now, Bitget and its management have not further issued a public statement regarding the allegations. The silence contributes to the ambiguity surrounding the episode.
At the same time, traders and analysts keep an eye out for wallets associated with the withdrawal. Depending on movements in the future, either accumulation or distribution might be able to clarify intention.
The crypto market has seen its share of these types of pre-move disruption events, where huge block movements of suspicious origin occurred just prior to big price moves. For some of them, these were eventually linked to institutional positioning or internal exchange operations; while others raised more troubling questions about market manipulation.
The matter is still open for now. With the withdrawal scale and subsequent price jump unfolding so rapidly, it was certainly an event that got Bitget into a negative spotlight.
The Moment of Trust in Crypto Markets
Perhaps this episode will be remembered as a major test of transparency and accountability for the crypto industry. With the expansion of institutional participation and market caps into the billions, expectations for governance and disclosure are rising too.
What the investors need to know, however, goes deeper than LAB price action, it is also amiss with regard to the structural factors that lead massive amounts of capital being tied up in poorly understood, opaque systems.
What happens next depends on whether the accusations against Bitget are pursued or ultimately fade away over the next several days. The only thing that can be said for sure is that the discussion about responsibility of centralized exchanges is still not over.
Disclosure: This is not trading or investment advice. Always do your research before buying any cryptocurrency or investing in any services.
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