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Blockchain investigator ZachXBT has accused LAB token insiders of secretly controlling more than 95% of the project’s token supply, even as it reached a fully diluted valuation of nearly $6 billion, while retail investors were kept in the dark about true circulation figures.
The allegations, published through reports by ChainCatcher on May 14, have placed renewed scrutiny on transparency standards within the crypto sector.
According to the claims, LAB Token insiders allegedly maintained control over more than 95% of the token supply while retail investors remained unaware of the true circulation figures. ZachXBT also accused the project’s leadership of altering lock-up conditions and facilitating preferential arrangements for selected traders and influencers.
The controversy centers on LAB founders Vova Sadkov and Mark, who were previously associated with the Eesee project. The allegations come as the LAB Token reportedly reached a fully diluted valuation of nearly $6 billion despite questions surrounding supply transparency and insider allocations.
The most serious accusations surrounding LAB Token involve claims that insiders and affiliated market makers retained overwhelming influence over the circulating supply while publicly available distribution data remained incomplete or misleading.
According to the reports, wallets allegedly tied to insiders recently withdrew more than 100 million LAB Token units from exchanges. ZachXBT argued that the movements represented hundreds of millions of dollars in value and could indicate coordinated control over market liquidity.
“Insiders likely control more than 95% of LAB tokens while retail investors remain unaware of the real circulation,” — ZachXBT.
The investigator also accused the LAB Token team of concealing important tokenomics data from investors. He alleged that circulation figures presented publicly did not accurately reflect insider-held allocations or the extent of exchange-linked wallet activity.
The allegations have fueled broader concerns about transparency practices within rapidly growing crypto projects, particularly those that achieve multibillion-dollar valuations before independent verification of token distribution.
Beyond the supply concerns, the LAB Token controversy also includes accusations related to investor lock-up terms and promotional arrangements involving influencers and large holders.
According to ZachXBT, the project allegedly extended the public-sale lock-up period from three months to nine months without sufficient transparency. At the same time, he claimed that select key opinion leaders and whales received favorable treatment involving token access and liquidity arrangements.
“Some influencers were allegedly required to publish promotional content in exchange for favorable access to tokens and liquidity arrangements,” according to the ChainCatcher report.
The accusations have renewed debate around the role of influencers in crypto markets, especially in cases where promotional campaigns may not fully disclose compensation structures or insider incentives.
Analysts have increasingly warned that concentrated ownership structures can distort price discovery in thinly distributed token ecosystems. Critics argue that projects with tightly controlled supply may expose retail investors to heightened volatility, particularly if insiders coordinate large token movements through exchanges or over-the-counter channels.
The LAB Token case has also highlighted ongoing concerns about disclosure standards across decentralized finance projects, where investor protections often depend heavily on voluntary transparency rather than formal regulatory oversight.
In a separate report discussing the wider implications of his findings, ZachXBT called on centralized exchanges to investigate LAB Token trading activity and consider freezing suspicious funds if evidence of manipulation emerges.
The investigator warned that concentrated ownership structures can create conditions for coordinated dumping activity and severe price swings. However, he also cautioned traders against interpreting his comments as an invitation to short LAB Token.
“Concentrated insider ownership could instead become fuel for squeezes against bearish traders,” — ZachXBT.
The warning mirrors concerns ZachXBT previously raised during the collapse of the RAVE token ecosystem, where he alleged insiders controlled between 90% and 95% of supply before a sharp selloff erased billions in paper value.
The latest LAB Token allegations add to a growing list of investigations associated with ZachXBT this year. Earlier reports linked the investigator to criticism of alleged illicit USDC flows and concerns surrounding religion-themed token launches across the crypto market.
The LAB Token controversy is likely to intensify calls for stricter transparency standards around token distribution, insider allocations, and exchange oversight.
While the LAB team has not publicly responded to the allegations, the dispute underscores a recurring challenge facing the cryptocurrency sector: balancing decentralized market innovation with investor protection and accountability.
Industry observers note that projects with opaque supply structures often face credibility issues once independent blockchain investigators begin tracking wallet activity. In the absence of formal disclosure requirements, on-chain analysis has increasingly become a primary tool for identifying potential manipulation risks.
The LAB Token allegations also arrive at a time when regulators and exchanges are under mounting pressure to improve due diligence standards for newly listed digital assets. Questions surrounding insider concentration, undisclosed market-making agreements, and influencer marketing practices continue to shape conversations about the future credibility of the crypto ecosystem.
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