The Mantra blockchain ecosystem is reeling after its native token, OM, suffered a sudden 90% crash on April 13 an event the team attributes to aggressive and unannounced liquidations by at least one centralized crypto exchange.
According to John Mullin, co-founder of Mantra, the incident was triggered by what he described as “reckless forced closures” of OM account positions without sufficient warning, occurring during low-liquidity trading hours.
The price of OM collapsed from around $6.30 to under $0.50 in a matter of hours, wiping out more than $5.5 billion in market capitalization. Mullin, posting on X, emphasized that the event's timing - Sunday evening UTC, early Monday morning in Asia - raises serious concerns about negligence or potentially manipulative intent by the unidentified exchange.
While the Mantra team has stopped short of publicly naming the responsible platform, Mullin clarified in online replies that Binance was not involved. A broader investigation is underway, and further details are expected to be shared in an upcoming community event on X.
Whale Movements and On-Chain Signals Preceded the Collapse
Even before the crash, blockchain analytics platforms had flagged unusual token movements. Spot On Chain reported that three days prior to the plunge, OM whales transferred over 14 million tokens to the crypto exchange OKX.
Those same entities had acquired more than 84 million OM in March for an estimated $564.7 million. Following the drop, their holdings were valued at just $62.2 million, signaling a possible unrealized loss of over $400 million - although Spot On Chain suggested they may have hedged their exposure through other means.
Simultaneously, Lookonchain observed that 17 wallets deposited a combined 43.6 million OM - about 4.5% of the circulating supply - into various exchanges starting April 7, signaling growing selling pressure ahead of the crash.
Community Speculation and Denials
The dramatic drop sparked speculation in crypto circles, with some traders accusing the Mantra team of a “rug pull” or suggesting they used OM as collateral for a large loan that got liquidated due to tightened risk parameters.
Mullin categorically denied those allegations. “The team did not have a loan outstanding,” he stated, adding that all tokens remain locked under the published vesting schedule and that wallet activity is transparently tracked on-chain. He reaffirmed the integrity of OM’s tokenomics, citing the latest token report released last week.
Following the crash, OM briefly rebounded to above $1 but has since retraced to approximately $0.78, per CoinGecko. The token’s all-time high of nearly $9 on February 23 now feels distant, with OM down over 91% from that peak.
A Setback Amid Major Strategic Developments
The crash marks a major disruption for Mantra, which has recently made significant strides in establishing itself as a leading player in real-world asset (RWA) tokenization. In January 2025, the platform signed a landmark $1 billion deal with investment giant DAMAC to tokenize parts of its portfolio.
Additionally, Mantra secured a Virtual Asset Service Provider (VASP) license from Dubai’s Virtual Assets Regulatory Authority in February, underscoring its commitment to regulatory compliance and institutional partnerships.
This sudden downturn raises questions about centralized exchange risk in DeFi ecosystems - especially for projects dealing with large-scale tokenized assets. As regulatory frameworks and best practices continue to evolve, the Mantra incident may serve as a case study in the importance of risk management, transparency, and the dangers of liquidity crunches in thin trading hours.