OM Token Plunges 90%, $6B Lost as Mantra Team Blames Liquidations

Insider Dump Allegations, Exchange Risks, and Fundamental Changes Fuel Investor Panic

OM, the native token of Mantra’s real-world asset tokenization platform, collapsed by over 90% within a single hour on April 13, plunging from around $6.30 to as low as $0.37. The wipeout erased more than $6 billion in market capitalization, sending shockwaves across the crypto sector. 

At its February peak, OM traded at $8.89—now marking a 91% drop from its all-time high. The crash reduced OM’s market cap from $6.09 billion to under $700 million, triggering a fresh round of criticism and speculation over potential insider manipulation and structural flaws within the protocol.

On-chain data pointed to large pre-crash transfers, fueling community suspicions of coordinated sell-offs by insiders. Spot On Chain revealed that 14.27 million OM were sent to OKX three days before the collapse. The same wallets had acquired 84.15 million OM for $564.7 million in March and now hold only $62.2 million worth, incurring estimated losses of over $400 million. 

Additional tracking by Lookonchain showed 17 wallets deposited 43.6 million OM—roughly 4.5% of circulating supply—into exchanges since April 7. These movements sparked intense backlash online, with several users on X calling it a rug pull orchestrated by the so-called “Kabal team.” 

One widely circulated post read, “They controlled the supply and manipulated the price so they could dump their tokens OTC,” while another declared the project “dead.”

The Mantra team has denied all accusations of a rug pull or insider token dumping. 

Co-founder John Patrick Mullin said the crash was triggered by forced liquidations initiated by centralized exchanges during low liquidity hours—Sunday evening UTC. He refused to name the exchange allegedly responsible but confirmed it was not Binance. “It’s unprecedented… I literally woke up 30 minutes ago to this,” Mullin stated, adding, “No rug pull. Tokens remain locked under vesting schedule.” He also claimed the team had not taken out any loans and blamed the crash on sudden closures of large positions that lacked warning.

Still, the community narrative diverged sharply. Users posted screenshots of a locked Telegram group and frozen communication from moderators, but JP Mullin, co-founder of Mantra, stated that the project's Telegram group remains active. Concerns also rose amid broken promises surrounding a delayed 50 million OM airdrop. Comments described a “death spiral” from cascading panic liquidations, while trading volume soared by 2,979%. Several community figures likened the event to past catastrophic collapses like FTX and Terra, with users reporting seven-figure losses. The tone across crypto social platforms painted a grim picture of trust erosion and operational opacity.

Binance issued a formal acknowledgment of the situation, highlighting risk exposure across exchanges and referencing cross-exchange liquidations, especially those involving Bybit. The exchange also underscored recent tokenomics shifts by Mantra, which included a supply expansion from 888.9 million to 1.77 billion OM, removal of the total supply cap, and the introduction of 3% annual inflation for staking rewards. Binance noted it had reduced leverage exposure to OM since October 2024 and warned users about these tokenomic changes as early as January 2025.

Amid the chaos, market activity around OM remained volatile. The token briefly rebounded above $1 but later settled in the $0.7 range. Across exchanges, daily liquidations surpassed $70 million. Some attempted to find stability in the protocol’s prior deflationary actions, including a burn of 21.229 million OM worth $132 million on April 2. To date, over 84 million OM—valued around $524 million—have been burned, although that has done little to calm investor nerves.

The broader implications extend beyond token price action. The collapse has cast a shadow over the real-world asset (RWA) tokenization sector, where Mantra was emerging as a leading player. Regulatory concerns are mounting, especially given Mantra’s $1 billion tokenization partnership with Middle East real estate conglomerate DAMAC and its status as a licensed virtual asset service provider under Dubai’s VARA. Kronos Research CEO Hank Huang said the crash “highlights the infancy of the RWA space” and emphasized the urgent need for stronger compliance, transparency, and investor protection frameworks.

Laser Digital, Nomura’s digital assets division and a strategic investor in Mantra, publicly pushed back against allegations linking it to the recent OM token crash. On-chain analysts, referencing Arkham Intelligence data, initially accused Laser Digital of triggering the collapse by moving substantial amounts of OM tokens onto cryptocurrency exchanges. 

However, Laser Digital firmly denied the allegations via social media on April 14, emphasizing that the wallets in question, specifically wallet 0xB37DBD flagged by observers, were not involved in dumping tokens but rather executed a routine collateral return transaction. The firm reiterated that its core OM token holdings remain securely locked, consistent with the strategic investment commitment they established with Mantra back in May 2024.

Adding to the chorus of clarifications, Shorooq Partners, another significant investor, categorically denied any OM token sell-off leading up to the crash. Shorooq underlined its dedication to Mantra’s long-term growth strategy, going so far as to publicly disclose its wallet addresses to reaffirm transparency and alleviate community fears. 

Meanwhile, OKX, a major crypto exchange deeply involved in the OM ecosystem, quickly adjusted its risk parameters for OM tokens in the aftermath of the collapse. CEO Star Xu described the crash as a "major scandal," promising a detailed and comprehensive investigation to shed light on suspicious activities. Xu highlighted unusual coordinated movements involving sizable OM token deposits and withdrawals across various exchanges starting from March 2025. The exchange recognized significant alterations in OM’s tokenomics since October 2024 as a contributing factor to the volatility, pledging more transparency moving forward.

Binance, identified by Mantra’s CEO as holding the largest OM token reserves among exchanges, also found itself under scrutiny due to a 38-million OM transfer on April 14. Contrary to initial speculations, this significant token movement was clarified by Mantra as related purely to the conclusion of a staking program rather than any panic-driven liquidation or selloff. This clarification was essential to dispel fears that Binance was directly contributing to the OM price decline.

To stabilize market sentiment and initiate recovery, Mantra CEO Mullin emphasized in an April 14 AMA session that token recovery had become the team’s “preeminent and primary concern.” The company disclosed ongoing discussions about potential buyback and burn strategies for OM tokens, although Mullin admitted these plans are still in preliminary stages. 

Furthermore, Mantra previously announced the launch of a $109 million Mantra Ecosystem Fund (MEF), involving prominent backers such as Laser Digital, Shorooq Partners, Brevan Howard Digital, Amber Group, Damac, Valor Capital, and LVNA Capital. Mullin confirmed that the MEF includes substantial dollar-based investments beyond OM tokens alone, positioning it as a critical vehicle for ecosystem support and market recovery.

Mullin also provided insight into the mechanics behind the catastrophic token sell pressure. He attributed many controversial OM token transactions to their use as collateral on an unnamed exchange. When the exchange unexpectedly pulled its support or revised position controls, this forced the liquidation of large collateral positions, igniting the sell-off spiral that severely impacted OM’s market value.

While the dust has yet to fully settle, observers and analysts await further clarity. For now, the OM crash stands as one of the most dramatic breakdowns in recent DeFi history—an episode marked by opaque insider activity, sudden market dislocation, and renewed questions about trust and accountability in a sector still finding its footing.

This article has been refined and enhanced by ChatGPT.