Mantra team: OM crash was caused by centralized exchanges

Mantra (OM) explained the 98% crash of its native token with the actions of centralized exchanges. According to the team, several centralized exchanges closed the accounts of OM holders without thinking about the negative impact on the token’s price. 

The crash of Mantra (OM) was not due to the token’s ecosystem, but was probably due to the actions of centralized exchange operators. John Patrick Mullin, the project’s CEO, wrote a statement on the probable reason for the crash. 

“We have determined that the OM market movements were triggered by reckless forced closures initiated by centralized exchanges on OM account holders. The timing and depth of the crash suggest that a very sudden closure of account positions was initiated without sufficient warning or notice.”

~ wrote Mullin in a post on X. 

The statement arrived just hours after the crypto community set out doubts on the team’s involvement with the market crash. OM was already sliding in the days before the crash, and there were rumors of insider selling and an eventual rug-pull. 

Mullin explained the crash was partially due to the low liquidity late on Sunday, which coincided with the most inactive hours on the Asian market. He admitted centralized exchanges had their internal rules, but in the case of OM, the account closures were not coordinated with the team. 

Whale selling preceded OM crash, but CEO denies insider trading

The crash did not happen due to the sale of OM tokens by the team, the MANTRA Chain Association, advisors, early backers, or any other entities selling tokens, added Mullin. A big part of the OM supply remains locked with a long-term vesting schedule. 

However, according to Arkham, in the days before the crash, several wallets deposited OM to exchanges. One of the wallets sent over 470K OM to Binance, while another address made a series of deposits to OKX. One of the wallets was tagged as belonging to Laser Digital, or LD Capital, one of the early backers of Mantra. The attempted selling also happened during low liquidity periods, meaning the insiders only realized a fraction of their value on paper. Laser Digital has also invested in Berachain (BERA), Plume Network (PLUME), Illuvium (ILV) and other high-profile Web3 projects.

One of the high-profile sales happened just hours before the OM crash. A wallet linked to influencer and VC investor Shane Shin deposited 2M OM after a year of holding the tokens. Shin had mentioned OM multiple times and shilled the Mantra project.

The selling was relatively minor compared to the subsequent loss of value for OM. The Mantra community relied on most of OM being locked and held closely, not expecting a rug pull from a well-established project. 

ZachXBT raised hypothesis of OM wallet exploits

One of the hypotheses on the price effects for OM is that the selling was not intended, but a possible result of a hack. On-chain investigator ZachXBT claimed Mantra was not easily researched, since it is a Cosmos chain project, with limited tools for tracking and exploration. However, he allows the possibility for a hack or an exploit to explain the token sales. 

There’s no question it was a heavily manipulated token via MMs / supply control

— ZachXBT (@zachxbt) April 13, 2025

Whatever the cause, the effect on OM was outsized. Hours after the crash, OM regained some of its positions, up to $0.80, but there are still doubts about the project’s soundness. The Mantra DAO is also suffering, remaining with just $1.9M in its reserves, as 99.7% of the treasury was held in OM tokens. 

Even during the OM market rally, there were rumors that the token’s price action was due to the influence of market makers. The rapid rise of OM and the chart’s rapid rise have led to risk warnings in the past few months. The existing doubts amplified the effect of the initial selling, leading to the erasing of over 98% of OM’s market capitalization.

OM has been around since the 2020 market lows, trading at around $0.40 for years. The token only broke out during the 2024 bull cycle, when RWA tokenization became a hot narrative.

The Mantra project has taken a long time before its big rally, while the initial team and backers held at least 30% of the supply. The Mantra project launched with $11M from fundraising rounds, but the token’s value expanded to as much as $6B.

The crash of OM wiped out the entire RWA token narrative. The collective tokens are now valued at $35B, with Chainlink (LINK) as the leading asset.

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