The business was just lately rocked by the catastrophic collapse of $OM, the native token of the Mantra undertaking, on April 14. In hours, $OM plummeted by over 90%, wiping out billions in market worth and leaving traders reeling.
What started as a promising real-world asset (RWA) tokenization undertaking rapidly become a cautionary story of market manipulation, questionable practices, and shattered belief. This text delves into the $OM crash, its underlying crimson flags, and the broader implications for the crypto area.
Mantra Dump – A Single Candle Wipes Out $6 Billion In a single day
About Mantra
Mantra is a Layer 1 blockchain centered on tokenizing real-world property (RWAs) with a security-first method, constructed on the Cosmos SDK for institutional use. Its $OM token, launched in 2020, drives governance, staking, and transactions. Centralized exchanges like Gate.io, OKX, and Binance listed $OM, enhancing liquidity by way of pairs like OM/USDT. The token soared to an all-time excessive of $6.30 in early 2025, skyrocketing 500x from its low, fueled by market hype and FOMO, although later investigations tied its rise to speculative manipulation.
Historic Collapse
On April 14, the $OM token skilled some of the dramatic crashes in current crypto historical past, plummeting over 90% in a single day. The token, which had been buying and selling at round $6.30 only a day earlier, collapsed to a low of $0.40, decreasing its market capitalization from practically $6 billion to a mere $683 million. This sudden drop triggered over $74.7 million in liquidations, with some particular person positions shedding greater than $1 million every.
Supply: Coinmarketcap
The crash was so extreme that it erased years of positive aspects for $OM holders, a lot of whom had been drawn in by the token’s meteoric rise of over 500x from its all-time low. Many traders suspected that this was a rug pull and manipulation from Mantra’s staff, which equally occurred within the LUNA case earlier than.
The same case of LUNA’s crash – Supply: TradingView
Moreover, the neighborhood uncovered a notable connection between the $OM token crash and Laser Digital, which made a strategic funding in Mantra in Might 2024. Two of the 17 wallets linked to the incident have been allegedly tied to Laser Digital. Nonetheless, the group rapidly denied any involvement, refuting claims of interference within the matter.
2-linked pockets deal with from Laser Digital – Supply: Arkham Intelligence
Whispers of a Surprising Rug Pull Scheme
John Patrick Mullin, the co-founder of Mantra, instantly refuted any allegations of inside manipulation or rug pull. He attributed the collapse to “reckless compelled closures initiated by centralized exchanges on OM account holders,” claiming that these actions occurred with out adequate warning or margin calls. The Mantra staff insisted that their token allocations remained locked and verifiable on-chain, they usually have been actively investigating the incident to uncover the true explanation for the crash.
Sherpas, OMies, and broader crypto neighborhood,
First off, the staff and I tremendously admire the assist that we’ve obtained over the previous a number of hours, which we imagine is a testomony to the robust assist MANTRA has amongst its traders and neighborhood.
We’ve decided that…
— JP Mullin (🕉, 🏘️) (@jp_mullin888) April 13, 2025
Nonetheless, crypto investigator ZachXBT raised critical doubts in regards to the official narrative. He pointed to 2 people allegedly tied to the Mantra incident: Denko Mancheski, the founding father of Reef Finance, and a person named Fukugo Ryoshu. In accordance with him, these people had been reaching out to a number of events within the days main as much as the crash, looking for huge loans towards their $OM holdings. This revelation fueled hypothesis of coordinated market manipulation, particularly given Reef Finance’s personal historical past of comparable incidents, together with a Binance delisting in October 2024 and an $80 million OTC cope with Alameda in 2021.
Learn extra: Mantra Disastrous Meltdown: $5.5 Billion Vanishes In a single day in Collapse Echoing Luna Catastrophe
The impression on the neighborhood and traders was devastating. Many customers lamented the lack of $15 million and declared the business a “rip-off.” Others accused the Mantra and Binance groups of orchestrating a liquidity exit. The crash obliterated monetary portfolios and eroded belief within the RWA tokenization sector, elevating broader questions on market stability and the integrity of centralized exchanges.
Crimson Flag Surrounding the Mantra Undertaking and $OM Token
Whereas some could have perceived the $OM crash as sudden, a better examination of the Mantra undertaking reveals a sequence of warning indicators that had been constructing for a while. These warning indicators paint a troubling image of a undertaking that will have been constructed on shaky foundations.
Suspected Workforce and Mantra Undertaking Itself
First, market analysts found that the Mantra staff managed an alarming 90% of the token’s circulating provide. This excessive focus of possession gave the staff important management over the token’s worth and liquidity, making it extremely prone to manipulation. Within the crypto area, such a construction typically raises considerations because it allows insiders to orchestrate pumps and dumps, which may negatively impression retail traders.
The staff behind Mantra DAO additionally has a controversial historical past. Experiences have surfaced that some staff members participated in fraudulent Preliminary Coin Choices (ICOs) through the 2017 crypto increase, whereas others have been linked to working a on line casino—a element that raised eyebrows in the neighborhood. Moreover, Mantra DAO has confronted authorized scrutiny previously for failing to supply clear monetary reviews, additional eroding belief in its operations.
One other level of concern was Mantra’s dealing with of a deliberate airdrop. The undertaking had introduced a 50 million $OM airdrop as a part of its Gendrop program, however simply earlier than the distribution, the staff banned 50% of contributors, claiming they have been bots—with out offering a transparent rationalization. The staff subsequently delayed the airdrop, leaving many customers pissed off and suspicious of the staff’s intentions. Compounding this, Mantra quietly altered its tokenomics with out correct communication, a transfer that additional fueled mistrust.
Massively Over-valued and Overhyped $OM Token
Rumors additionally circulated that the undertaking had offered giant OTC offers to traders at costs 50% beneath the market fee, a observe that might have allowed insiders to dump tokens whereas artificially inflating the token’s worth. This ties into one other obtrusive problem: the disconnect between $OM’s valuation and its fundamentals.
Previous to the crash, $OM had a totally diluted valuation (FDV) of roughly $10 billion, but its complete worth locked (TVL) was a mere $4 million. This stark disparity reveals that market manipulation, FOMO, and speculative narratives massively overhyped the token, quite than real demand driving its worth. The value, which had surged over 500x from its all-time low, was fragile and susceptible to collapse because of the lack of actual shopping for strain.
Supply: DefilLama
When the crash lastly occurred, $OM’s valuation plummeted by practically $6 billion, however the TVL solely declined by simply over $1 million. This statement raises a essential query: did the TVL in Mantra’s ecosystem genuinely mirror person exercise, or did the undertaking artificially inflate it? The suspiciously small TVL decline in comparison with the large valuation loss signifies that the staff could have manipulated the ecosystem’s exercise to falsely recommend adoption and worth.
The involvement of figures like Denko Mancheski, who has a historical past of market manipulation with Reef Finance, solely provides to the suspicion. Reef itself skilled the same pump-and-dump cycle, surging 650% earlier than crashing 64% after a Binance delisting in 2024. The parallels between Reef and Mantra, coupled with ZachXBT’s findings, recommend that $OM’s rise and fall could have been orchestrated by skilled manipulators who exploited retail traders’ belief and FOMO.
Conclusion
The $OM token crash highlights the dangers in crypto, particularly in hyped initiatives missing transparency. Regardless of Mantra’s denials, crimson flags like concentrated token possession, a shady staff historical past, and suspicious offers forged doubt. This saga stresses the necessity for investor diligence in a hype-driven market and requires higher regulation and safeguards because the business matures.
