Blockchain investigator ZachXBT has issued a warning to crypto traders about Rain Protocol, alleging that the project is connected to a network of questionable on-chain activity and may be benefiting from artificial market support.
The claims target Rain Protocol, a prediction market project that ZachXBT says has reached an $8.8 billion valuation despite limited adoption, low user activity, and a lack of prominent investors backing the platform.
On-Chain trails point to DOP and TOMI connections
According to ZachXBT’s investigation, wallets linked to the Rain Protocol team share funding paths with the Data Ownership Protocol (DOP) and TOMI ecosystems. The connections were allegedly traced through the Gems hot wallet and several centralized exchange deposit addresses.
As part of the evidence, ZachXBT highlighted a series of small “dust” transactions sent to the same wallet on October 14, 2025. He claims a wallet tied to the Rain deployer and another associated with the TOMI team multisig interacted with the same destination address within seconds of each other.
The investigator further noted that the recipient’s wallet later received funds from an address that had previously been funded by a DOP multisig wallet. In another transaction chain, a separate address reportedly used the same centralized exchange deposit address linked to the DOP deployer, adding to what ZachXBT described as overlapping activity between the projects.
Questions raised over Rain’s valuation
Beyond the wallet activity, ZachXBT argued that Rain Protocol’s market value appears disconnected from its underlying fundamentals.
He alleged that wallets associated with the project’s deployer used Uniswap V3 liquidity pools while routing spot transfers through the Gems hot wallet, a behaviour he says could indicate efforts to influence market activity.
The investigator also questioned the scale of Rain’s valuation, particularly after Enlivex, a Nasdaq-listed company, announced a $212 million treasury strategy involving the project in November 2025.
Citing data from DeFiLlama, ZachXBT said Rain Protocol currently holds approximately $27.2 million in total value locked on Arbitrum. However, he claimed the entire amount is concentrated in the project’s own token and that annual protocol revenue is around $1 million.
Kraken rating downgraded
The allegations also prompted ZachXBT to lower his rating for crypto exchange Kraken from S-tier to B-tier.
He criticized the exchange for what he described as insufficient due diligence before listing tokens such as M, RAIN, RIVER, and RAVE, which he characterized as low-quality or potentially manipulated assets.
ZachXBT also took issue with Kraken’s handling of a recent security breach, arguing that the exchange did not clearly communicate compensation plans for affected users. He contrasted Kraken’s response with exchanges including Coinbase and Bybit, which he said moved quickly to reimburse customers following security incidents.
In addition, the blockchain investigator announced that he has increased his bounty offer to as much as $100,000 for insiders willing to provide documents, communications, or other evidence related to alleged market manipulation schemes involving centralized crypto exchanges.
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