Mantra Crash News: Tokenomics, Liquidations Blamed for OM “Scandal”

In a massive industry shocker, the OM token from the Mantra Chain dropped over 90% in just one hour, erasing more than $5.5 billion in value and sending shockwaves through the crypto world. The crash began when a wallet—possibly linked to the OM team—deposited 3.9 million OM tokens on the OKX exchange. Since the team controls nearly 90% of the total OM supply, this sudden move raised serious concerns across the community.

What went wrong?

Suspicious Deposit Triggers Massive Sell-Off

While Mantra claims it had limited involvement, the timing of the deposit and the market’s reaction caused a chain reaction. The OM team has already faced criticism over the past year for alleged price manipulation, and this incident added more fuel to the fire.

The deposit triggered a major sell-off, with speculation that some earlier over-the-counter (OTC) deals had sold tokens at discounts of up to 50%. Panic spread, and as more investors rushed to exit, the selling pressure led to a wave of liquidations that pushed the token’s price even lower.

As the situation escalated, Mantra co-founder JP Mullin blamed the price collapse on “reckless liquidations.” Binance also commented, stating that cross-exchange liquidations played a big role in the crash.

A Major Scandal

OKX CEO Star Xu called the crash a major scandal for the crypto industry. He pointed out that all on-chain data—such as token unlocks, deposits, and liquidations—is publicly available and should be reviewed. He also promised that OKX would release a detailed report on what happened.

A separate report revealed that 17 wallets—including two connected to investor Laser Digital—transferred a total of $227 million worth of OM to exchanges shortly before the crash.

Critics Remain Skeptical

Mantra responded by assuring its community that the team did not move any tokens during the crash and that the project remains strong. But well-known blockchain investigator ZachXBT questioned the explanation and said it didn’t do much to restore confidence.

Suspicious On-Chain Activity

OKX reported that major changes were made to OM’s tokenomics back in October 2024. The exchange also flagged unusual large-scale activity involving similar wallets starting in March 2025. In response, OKX updated its risk controls and advised users to be cautious due to the increased risk in the market.

• Also Read :
• Why Did Mantra (OM) Crash? Binance Points to Liquidations and Token Supply Changes
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OM Rebounds 200%

Following the crash to $0.37, OM saw a sharp 200% rebound, briefly climbing to $1.10. Co-founder JP Mullin confirmed the project is still active, and the team’s official Telegram channel remains online.

However, some are comparing this rebound to the 2022 LUNA crash. After a brief bounce, LUNA collapsed again and failed to recover. Analysts like AmiCatCrypto are warning that OM could face a similar fate, predicting it may fall another 90% and calling the recent gains a short-lived “dead cat bounce.”

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