MANTRA’s OM Token Crashes 90% and Erases $5.5 Billion, Co-Founder Blames Centralized Exchanges

The MANTRA (OM) token suffered a catastrophic price collapse on April 13. The altcoin plummeted over 90% in under an hour, wiping out more than $5.5 billion in market capitalization. 

The sudden crash took OM from a high of $6.33 to below $0.50. Notably, it has drawn comparisons to the infamous Terra LUNA meltdown, with thousands of holders reportedly losing millions.

Why did MANTRA (OM) Crash? 

Multiple reports suggested that the trigger is a large token deposit linked to a wallet allegedly associated with the MANTRA team. Onchain data showed a deposit of 3.9 million OM tokens to OKX, sparking concerns about a possible incoming sell-off. 

“A wallet labeled as @LaserDigital_ deposited over $41 million worth of OM into OKX just 2 days ago. OM price has dumped 90% in the last few hours. This wallet received the majority of its $OM holdings from GSR over a year ago,” an analyst noted.

Given that the MANTRA team reportedly controls close to 90% of the token’s total supply, the move raised immediate red flags about potential insider activity and price manipulation.

MANTRA OM Price Crash. Source: TradingView

The OM community has long expressed concerns about transparency. Over the past year, allegations have surfaced suggesting the team manipulated the token’s price through market makers, changed tokenomics, and repeatedly delayed a community airdrop. The OKX deposit amplified fears that insiders might be preparing to offload.

Reports also indicate that MANTRA may have engaged in undisclosed over-the-counter (OTC) deals, selling tokens at steep discounts—in some cases, 50% below market value. 

Thus, the rapid decline in OM’s price pushed these OTC investors into losses. This allegedly sparked a mass exodus as panic selling took hold. The chain reaction triggered stop-loss orders and forced liquidations on leveraged positions, compounding the collapse.

The project’s official Telegram channel was locked during the fallout, which added to community frustration and speculation. Nonetheless, the MANTRA team has denied all allegations of a rug pull. They maintain that the members did not initiate the sell-off. 

In a public statement, co-founder John Patrick Mullin said the team is investigating what went wrong and is committed to finding a resolution. 

“We have determined that the OM market movements were triggered by reckless forced closures initiated by centralized exchanges on OM account holders. The timing and depth of the crash suggest that a very sudden closure of account positions was initiated without sufficient warning or notice,” wrote Mullin.

Mullin suggested that the nature and timing of these closures indicate either gross negligence or “intentional market positioning” by the exchanges. He emphasized that the team did not sell any of the locked tokens. In addition, Mullin assured that the project’s tokenomics remain unchanged and publicly verifiable.

“To be clear, this dislocation was not caused by the team, the MANTRA Chain Association, its core advisors, or MANTRA’s investors selling tokens,” he added.

If OM fails to recover, this would mark one of the largest collapses in crypto history since the Terra LUNA crash in 2022. Thousands of affected holders are now demanding transparency and accountability from the MANTRA team while the broader crypto community waits for answers.

“We’ll be providing further updates in the coming hours and days, to discuss these events further. We greatly appreciate the support that we have received over the past several hours, which we believe is a testament to the strong support MANTRA has among its investors and community,” MANTRA’s official account posted on X.

Meanwhile, Binance Support also commented on the OM crash. They stated that the price crash was due to cross-exchange liquidations, not actions specific to their platform.

“Our initial findings indicate that the developments over the past day are a result of cross-exchange liquidations,” the post read.

The statement stressed that Binance had risk controls in place since October, such as reducing leverage levels. Additionally, Binance explained that since January, it has been warning users directly on the OM spot trading page through a pop-up about significant changes to OM’s tokenomics—specifically, an increase in token supply.

Notably, the ripple effects of the OM crash were felt across the sector. According to the latest data, the market capitalization of Real World Assets (RWA) has dropped by 13.3%, down to $41.0 billion.

RWA Market Performance After OM Crash. Source: CoinMarketCap

However, the impact may be short-term. In a recent report, Ripple and Boston Consulting Group projected explosive growth for tokenized RWAs. By 2033, they project the sector to grow to $18.9 trillion.

This reflects a compound annual growth rate (CAGR) of 53% from the current $0.6 trillion.

BeInCrypto also noted significant growth in RWAs. Despite the market downturn, the sector has attracted institutional interest for its stability. Moreover, RWAs have also exceeded $20 billion in on-chain value.

This suggests that the MANTRA incident may be an isolated event. Therefore, it is unlikely to derail the broader RWA market’s long-term potential and growth trajectory.