Mantra’s OM Token Plummets 90% Amid Controversy: Forced Liquidations or Market Manipulation?

In an alarming turn of events reminiscent of the Terra LUNA debacle, the OM token of cryptocurrency platform Mantra experienced a staggering decline of 90% within mere hours. This sudden selloff, which occurred without a clear catalyst, has ignited conspiracy theories and fierce discussions in crypto circles. As the digital asset market grapples with this shocking news, traders and investors are left questioning the integrity of the trading environment.

What Triggered the OM Token’s Dramatic Drop?

Late Sunday into early Monday, the value of OM dropped precipitously from over $6 to just above 40 cents. This crash unfolded during typically low liquidity hours in the cryptocurrency market, a period when substantial trading volumes can lead to drastic price fluctuations. Such erratic movements often leave investors reeling and searching for answers.

Mantra Team Responds to the Crisis

In the wake of this crisis, the Mantra team took to social media to reassure their community. “We want to assure you that MANTRA is fundamentally strong,” they stated in an X post. They emphasized that the price drop was largely due to reckless liquidations, not a reflection of their project’s stability. “Today’s activity was triggered by reckless liquidations, not anything to do with the project. This was not our team. We are looking into it and will share more details about what happened as soon as we can.”

Understanding Mantra’s Unique Proposition

Mantra is an innovative platform that allows users to tokenize real-world assets (RWAs) such as real estate and commodities. By enabling compliant digital investments in tangible assets, Mantra aims to bridge the gap between traditional finance and the burgeoning world of cryptocurrency. The OM token plays a crucial role in facilitating transactions and governance within the Mantra ecosystem.

Recent Developments and Partnerships

In January 2025, Mantra made headlines by partnering with DAMAC Group, a UAE-based conglomerate, to tokenize a staggering $1 billion in assets spanning real estate, hospitality, and data centers. This partnership positioned Mantra as a key player in the rapidly evolving landscape of tokenized assets.

The Surge Before the Fall: OM’s Remarkable Performance

Before the crash, OM had been one of the biggest market gainers in 2024, boasting an impressive 400% increase. This surge occurred with relatively low public discourse on crypto-related social media, which intrigued traders and investors alike. The token’s rapid rise raised questions about its underlying strength and sustainability.

Allegations of Market Manipulation

Adding to the intrigue, co-founder John Patrick Mullin suggested that the sharp decline in OM’s price was likely due to centralized exchanges closing positions linked to OM accounts. “We have determined that the OM market movements were triggered by reckless forced closures initiated by centralized exchanges on OM account holders,” Mullin stated in a subsequent X post. He highlighted that the timing and severity of the crash indicated a sudden closure of account positions without adequate warning.

Market Data and Liquidations

The fallout from this event was significant. OM-tracked futures recorded an unprecedented $50 million in liquidations, marking a record figure for the token. Open interest plummeted from $345 million to just over $130 million, signifying a rapid exit for unsettled futures bets. Such drastic shifts in market dynamics often signal deep-seated issues within trading practices and platform reliability.

Industry Reactions and Broader Implications

Despite the Mantra team’s assurances, skepticism remains prevalent within the crypto community. Many prominent voices in the industry have expressed doubts about the narrative presented by the company. For instance, OKX founder Star Xu responded to the situation by pointing out that over $220 million in token deposits had occurred on exchanges prior to the crash. “It’s a big scandal to the whole crypto industry. All of the on-chain unlock and deposit data is public, and all major exchanges’ collateral and liquidation data can be investigated. OKX will make all of the reports ready,” Xu stated.

Conclusion: What Lies Ahead for Mantra and OM Token?

The dramatic decline of Mantra’s OM token raises critical questions about market integrity, the role of centralized exchanges, and the overall health of the cryptocurrency ecosystem. As the situation unfolds, investors and traders must remain vigilant, assessing the implications of forced liquidations and potential market manipulations. Moving forward, it will be crucial for platforms like Mantra to enhance transparency and build trust within their communities to avoid similar crises in the future.

For those looking to navigate the world of cryptocurrency, understanding how to buy Bitcoin, Ethereum, or even Solana can provide a solid foundation for investment strategies. To learn more about trading and investing in cryptocurrencies, check out our guides on How to Buy Bitcoin and How to Buy Ethereum.

As the crypto landscape continues to evolve, staying informed about market dynamics and emerging trends is essential for making informed decisions. Remember, the world of cryptocurrencies is fraught with volatility, and ongoing education is key to navigating this complex terrain.