Mantra's OM Token Crashes 90% Amid Liquidation Chaos and Insider Concerns

The sudden crash sparked widespread speculation, with many investors raising concerns about potential forced liquidations, insider activity, and centralized exchange vulnerabilities. Market analysts drew parallels with past high-profile collapses, including the infamous Terra/LUNA implosion in 2022.

John Patrick Mullin, co-founder of Mantra, took to social media to address the unfolding chaos. He attributed the dramatic price movement to “reckless forced closures” on centralized exchanges and emphasized that it was not the result of actions by the Mantra team or early investors.

Much of the suspicion has centered around large OM transfers to major centralized exchanges , particularly OKX and Binance, shortly before the crash. Blockchain sleuths flagged significant wallet movements, suggesting that whales or insiders may have offloaded tokens in anticipation of a steep price correction.

Further fueling concerns was the crash’s timing, which occurred during low-volume trading hours, typically a period more susceptible to price manipulation. Critics noted that the steep decline was likely exacerbated by a cascade of liquidations triggered by margin positions across several platforms.

Despite his statements, the Mantra team faces mounting scrutiny, particularly given the project’s recent legal troubles. A Hong Kong court recently ordered six DAO members to disclose financial records amid allegations of fund misappropriation, casting a shadow over the team’s governance practices.

The crash comes just weeks after Mantra announced a $1 billion deal with UAE-based real estate giant DAMAC to tokenize physical assets on its blockchain. The company had also secured a virtual asset service provider (VASP) license from Dubai’s Virtual Assets Regulatory Authority (VARA), further solidifying its position in the growing real-world asset (RWA) tokenization sector.

That momentum now appears to be in jeopardy. Observers warn that the damage to investor confidence, combined with potential regulatory inquiries, could derail Mantra’s expansion plans in the short term. Meanwhile, OM’s price has shown limited signs of recovery, hovering around $0.60 as of April 14. Whether this represents a bottom or a temporary pause in volatility remains to be seen.

The incident has once again highlighted the vulnerabilities in the crypto ecosystem, especially the risks posed by over-reliance on centralized platforms, opaque governance structures, and speculative momentum. As regulatory scrutiny intensifies and investor skepticism grows, Mantra’s next moves could prove decisive for its survival.