Mantra's OM Token Plummets 90% in Four Hours Amid Forced Liquidations

On April 13, the price of Mantra's native token, OM, experienced a dramatic decline, losing approximately 90% of its value within just four hours. The token's price plummeted from around $6.30 to below $0.50, erasing billions in market value. The sudden drop sparked speculation and concern within the community, with some alleging market manipulation and others expressing skepticism about the project's transparency.

Mantra's chief executive officer, JP Mullin, attributed the crash to forced liquidations by centralized exchanges. In a post on X, Mullin explained that these actions were taken suddenly and during low-liquidity hours on Sunday evening UTC, which may have amplified the market impact. He clarified that the sell-off was not due to any token sales by the Mantra team or its investors, noting that OM tokens remain locked according to the project’s vesting schedule. Mullin also reaffirmed the project’s long-term commitment and called for continued support from the community.

However, some independent analysts have made contradictory claims. One crypto analyst, Max Brown, claimed that the sell-off started when 3.9 million OM tokens were deposited on OKX by a wallet that was thought to be connected to the Mantra team. Given that the team allegedly controls almost 90% of the total supply, this move alarmed the market and triggered a sell-off. The sharp sell-off erased more than $5.5 billion in market capitalization, shrinking OM’s market cap from $6 billion to below $485 million at its lowest point. The token is trading at $0.8623 as of press time, down 90% from its February all-time high of $8.99.

Mantra, launched as a regulatory-compliant real world asset-focused layer-1, has made headlines in recent months for its partnerships and regulatory progress. In January, it signed a $1 billion deal with a real estate giant to tokenize assets. Mantra was also granted a virtual asset service provider license by Dubai’s VARA in February, allowing it to operate lawfully in the UAE. Despite these achievements, the crash has renewed earlier criticism of the project. Some traders have expressed concerns about transparency and exchange processes, comparing the crash to past collapses like that of Terra.

Mullin emphasized that the sell-off was not triggered internally and that the project team is working on a response to address community concerns. The project's Telegram group has been closed to new members as the team investigates the incident. Mullin further clarified that the crash was not caused by Binance but by improper forced liquidation by other centralized exchanges. He claimed that a major OM holder faced a forced liquidation, which triggered a cascade of sell-offs. The MANTRA team has pledged to share more details soon and has denied any internal sales, blaming the crash on the reckless forced liquidation of centralized exchanges. The community lead, Dustin McDaniel, addressed the concerns on the project’s Telegram channel, assuring that the core team is aware of the situation and is actively working on a resolution. The team's response has been swift, aiming to restore confidence and transparency within the community.