Blockchain investigator ZachXBT is urging traders to avoid Rain Protocol after uncovering what he describes as suspicious on-chain activity linked to the project.
In his latest analysis, ZachXBT portrayed the prediction market protocol—reportedly carrying an $8.8 billion market capitalization and ranking among the top 15 crypto assets—as having limited real user adoption, minimal product traction, no prominent backers, and a team with little verifiable history in the industry.
Connections to Troubled Crypto Projects
His on-chain research indicates that wallets connected to the RAIN team share funding pathways with the Data Ownership Protocol (DOP) and TOMI ecosystems via the Gems hot wallet and several centralized exchange deposit addresses, implying an operational overlap between these projects.
As part of his evidence, ZachXBT pointed to two small “dust” transactions sent to the same address on Oct. 14, 2025. He reports that a wallet tied to the RAIN deployer sent a token dusting to that address at 15:31:47 UTC, while a wallet he associates with the TOMI team multisig and an exchange deposit address sent another dust transfer to the same destination 36 seconds earlier. He also notes that the recipient later received funds from an address previously funded by a DOP multisig.
In a separate chain of transactions, the investigator says another wallet sent funds to an address that later used the same centralized exchange deposit address linked to the DOP deployer.
ZachXBT additionally alleges that RAIN’s market behavior shows signs of on-chain price manipulation. He claims addresses tied to the deployer relied on Uniswap V3 liquidity pools while routing spot transfers through the Gems hot wallet. He questions RAIN’s valuation and points out that Enlivex—presented as the protocol’s decentralized autonomous treasury and a Nasdaq-listed company—announced a $212 million treasury strategy in November 2025, despite the protocol’s apparent small scale compared with established prediction market platforms like Kalshi or Polymarket.
Using DefiLlama data, he reports that RAIN has $27.2 million locked on Arbitrum but contends that the holdings are concentrated in the project’s own illiquid token and that the protocol generates only around $1 million in annual fees. He also underscores ties between TOMI, DOP and Sirin Labs to controversial Israeli entrepreneur Moshe Hogeg, who was arrested in 2021 and later faced police allegations related to a $290 million crypto fraud scheme.
Kraken Rating Lowered to B-Tier
ZachXBT says he downgraded his assessment of crypto exchange Kraken from S-tier to B-tier, citing what he calls a “lack of due diligence” before listing tokens he labels “low-quality” or manipulated, including M, RAIN, RIVER and RAVE. He also criticized Kraken’s handling of its recent security incident, saying the exchange’s public disclosure omitted details about compensation for affected users.
By contrast, he highlights that other exchanges such as Coinbase and Bybit prioritized compensating customers following their own security breaches. ZachXBT has also increased a bounty to up to $100,000 for insiders who can provide documents or chat logs related to alleged market-manipulation schemes at centralized exchanges.