Blockchain detective ZachXBT is warning traders to steer clear of Rain Protocol after claiming to have uncovered a pattern of suspicious on-chain activity surrounding the project.
In the latest update, ZachXBT described the prediction market project, which he said has an $8.8 billion market capitalization and ranks among the top 15 crypto assets, as having few users, limited product traction, no notable backers, and a team with little established history in the industry.
Links to Failed Crypto Projects
According to his on-chain investigation, wallets tied to the $RAIN team share funding trails with the Data Ownership Protocol (DOP) and TOMI ecosystems via the Gems hot wallet and several centralized exchange deposit addresses, which suggests an overlap between the projects.
As evidence, ZachXBT highlighted two “dust” transactions that were sent to the same address on Oct. 14, 2025. According to his findings, a wallet linked to the $RAIN deployer sent a small transfer to the address at 3:31:47 p.m. UTC, while a wallet he associated with the TOMI team multisig and a centralized exchange deposit address sent another dust transaction to that same destination 36 seconds earlier. He also said that the recipient wallet later received funds from another address that had previously been funded by a DOP multisig.
In a separate transaction trail, the investigator said another wallet transferred funds to an address that later used the same centralized exchange deposit address as the DOP deployer.
ZachXBT also claimed $RAIN’s market activity shows signs of on-chain price manipulation, and alleged that addresses tied to the deployer used Uniswap V3 liquidity pools while routing spot transfers through the Gems hot wallet. He also took aim at $RAIN’s valuation, while highlighting that its decentralized autonomous treasury, Enlivex, a Nasdaq-listed company, announced a $212 million treasury strategy in November 2025 even though, according to him, the project is nowhere near the scale of prediction market platforms like Kalshi or Polymarket.
He cited DefiLlama data showing $RAIN has $27.2 million locked on Arbitrum, but said the entire amount is held in its own illiquid token and that the protocol generates only about $1 million in annual fees. TOMI, DOP and Sirin Labs projects are all linked to controversial Israeli entrepreneur Moshe Hogeg, who was arrested in 2021 and later faced police allegations over a $290 million crypto fraud scheme.
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Kraken Rating Cut to B-Tier
ZachXBT said he has lowered his rating for crypto exchange Kraken from S-tier to B-tier over “lack of due diligence” before listing what he described as “low-quality, manipulated tokens,” including M, $RAIN, RIVER and RAVE. He also criticized Kraken’s public disclosure of its recent security breach, and added that it did not mention compensation for affected users.
By comparison, he noted that exchanges such as Coinbase and Bybit prioritized compensating customers after their own security incidents. ZachXBT also raised his bounty to as much as $100,000 for insiders who can provide documents or chat logs related to alleged centralized exchange market manipulation schemes.