OM Token Crashes 93% in 24 Hours, Loses $5.5 Billion

On April 14, the OM token experienced a dramatic crash, plummeting from $6 to $0.37 within a span of 24 hours. This sudden collapse resulted in the loss of over $5.5 billion in market value, marking one of the most significant collapses in the history of cryptocurrency. As of the latest reports, the OM token is trading at $1.03, still down more than 87% from its all-time high of $8.99. The event has drawn comparisons to the infamous 2022 collapse of Terra Luna, leaving investors shocked and seeking answers.

The rapid and severe nature of the crash has led to widespread speculation and accusations, with some suggesting that insider selling may have played a role. Reports indicate that $227 million worth of OM tokens were transferred to exchanges prior to the crash, including wallets linked to Laser Digital. Mantra, the company behind the OM token, has vehemently denied any involvement in such activities, attributing the crash to a cascade of forced liquidations. According to Mantra, $65 million in OM contracts were liquidated, with $33 million of that occurring on Binance alone. A large transfer of OM tokens to OKX before the crash is believed to have exacerbated the losses, particularly due to the use of leverage.

In addition to the liquidation cascade, errors in algorithmic trading have been cited as a contributing factor. A market maker misinterpreted the collapse of OM, leading to a 20% increase in BTCDOM under the false assumption of a broader structural shift. This incident underscores how small tokens like OM can disrupt broader indexes through automated trading systems. The volatility was further exacerbated by cross-platform liquidations, prompting Binance to outline its risk control measures for OM, including reduced leverage and on-screen warnings. Since January 2025, Binance has categorized OM as a token with evolving tokenomics and an increased supply, keeping it under review.

Mantra's co-founder, JP Mullin, has dismissed accusations of insider involvement, instead blaming the crash on improper forced liquidations at multiple exchanges. He emphasized that the team and core investors' OM tokens remain locked according to the published vesting schedule. Mullin also suggested that negligence or manipulation by exchange platforms may have contributed to the collapse, noting that large positions were closed with insufficient warning, creating a domino effect. He promised further communication and a forthcoming community town hall to address questions directly.

The OM crash serves as a stark reminder of the risks associated with tokenized real-world asset (RWA) projects and their links to traditional finance. Despite strong partnerships with Google Cloud and Dubai’s DAMAC Group, Mantra's reputation is now on the line as it navigates this crisis. The incident also highlights major concerns about risk management on centralized exchanges, where high-leverage trading has been criticized for triggering such collapses. In just four hours, $58 million in OM contracts were liquidated, underscoring the destructive power of margin calls in a leveraged market.

In the aftermath of the crash, the price of OM partially recovered from $0.5 to $1.2. However, investor confidence has been severely impacted. The project's ability to recover will depend on several factors, including transparent communication with its community and investors, closer coordination with exchanges to prevent liquidation spirals, obtaining legal assessments to ensure regulatory compliance, and providing regular updates on token distribution and wallet activity. Currently, OM is ranked #97 in terms of global crypto with a market cap of $777 million, still far from its peak valuation. The fallout has rippled through the DeFi ecosystem, which continues to struggle with balancing innovation and investor protection.