The OM token, associated with the Mantra blockchain, experienced a dramatic market plunge on April 13, plummeting from roughly $6.30 to under $0.50 in a single day.
Data indicates that this steep drop wiped out over $5 billion in market capitalization, which fell from about $6 billion to a mere $530 million.
Currently, OM has seen a slight rebound to $0.71, with a market cap approaching $700 million, although it still represents a significant devaluation.
Mantra is a Layer 1 blockchain based on the Cosmos SDK, focusing on the tokenization of real-world assets while ensuring regulatory compliance. The platform recently obtained a virtual asset service provider (VASP) license from Dubai’s Virtual Assets Regulatory Authority (VARA).
Insider actions or a rug pull?
The situation has prompted intense investigation, with many speculating whether a technical breach, insider dealings, or a broader liquidity crisis was to blame.
Blockchain researcher ZachXBT suggested that a hack or vulnerability could have played a role, stating:
“I wonder if a few large wallets were compromised or if an exploit occurred (there were several significant thefts involving OM holders recently).”
Conversely, some members of the community pointed to questionable sell-offs possibly linked to insiders. Crypto analyst Nay detailed patterns that hinted at potential insider involvement.
Nay noted that several clean wallets containing tens of millions in OM tokens have been actively transferring funds between centralized exchanges. He also mentioned that over $70 million was funneled to exchanges in recent months using one intermediary wallet, an action he deemed highly suspect.
The scale of the collapse has prompted many to draw comparisons to the Terra LUNA disaster of 2022.
Response from Mantra
In a public statement, Mantra co-founder John Patrick Mullin asserted that the crash resulted from forced liquidations carried out by centralized exchanges (CEXs).
He claimed that numerous large positions were abruptly closed without warning, causing immediate sell pressure during low-liquidity trading periods.
Mullin indicated that the situation was exacerbated by poor timing, as these liquidations occurred on a quiet Sunday evening. He characterized the circumstances as either grossly negligent or potentially malicious.
Mullin elaborated:
“Centralized exchange partners play a crucial role in providing liquidity to projects like ours. We collaborate closely with them; however, they wield significant discretion. When that discretion is exercised without adequate internal and external oversight, incidents like what occurred can and will happen, adversely affecting both projects and investors.”
He also emphasized that no one from the Mantra team, its core advisors, or investors had sold or released tokens, which remain under a public vesting schedule.
Mullin stated:
“To clarify, this dislocation was not triggered by the team, the MANTRA Chain Association, its core advisors, or MANTRA’s investors liquidating tokens. Tokens are locked and subject to the established vesting periods. Our tokenomics remain sound, as indicated in our recent token report. Our token wallet addresses are publicly accessible.”
Although he refrained from naming specific exchanges, Mullin mentioned that the team is in the process of compiling a list and will provide further information soon.