MANTRA (OM) Token Crash: Unraveling the Chaos
Dramatic Drop in MANTRA (OM) Price Triggers Exchange Liquidations and Recovery Strategies
Here's the lowdown on the MANTRA (OM) token's 94% price plunge, from $6.30 to as low as $0.38, settling around $0.62. This turbulent ride left investors scratching their heads and questioning the token's fundamentals.
The crash happened during what CEO John Patrick Mullin described as "low liquidity hours on Sunday." In the aftermath, both the project team and major exchanges have offered explanations while investors grapple with their losses.
Binance, the leading cryptocurrency exchange, pinned the collapse on extensive cross-exchange liquidations. These liquidations created a domino effect across multiple platforms, not just Binance. The exchange also highlighted changes in MANTRA's tokenomics, including an increased circulating supply, which may have weakened price support levels.
Now, suspicions of insider actions have surfaced. On-chain investigator ZachXBT published claims that he spoke with several people who were offered loan deals against OM in the days before the crash. Two names repeatedly popped up in these allegations: Denko, the founder of Reef Finance, and Fukogoryushu. According to ZachXBT, they had “allegedly been reaching out to a number of people asking for massive loans against their OM” before the price crashed.
Adding fuel to the fire, a wallet tagged by Arkham Intelligence as belonging to Laser Digital, a crypto venture capital firm that backed MANTRA last year, reportedly transferred over $41 million worth of OM to OKX exchange just two days before the crash.
CEO Mullin has denied any insider dumping. In a live Q&A hosted by Cointelegraph, he said, "To be clear, this dislocation was not caused by the team, the MANTRA Chain Association, its core advisors, or MANTRA's investors selling tokens."
Mullin claimed that tokens remain locked and subject to published vesting periods, asserting that OM's tokenomics remain intact. He also promised to provide on-chain proof to back up these statements.
The OM token's struggles didn't begin with this crash. Critics had previously raised red flags about the project's operations. A 2023 Hong Kong court order required six MANTRA DAO members, including CEO Mullin, to turn over financial records after accusations of misusing funds.
While Mullin later stated that the dispute was resolved amicably, questions persisted about how the token's valuation was supported. On-chain data shows one blockchain wallet holds approximately 77% of OM's circulating supply. Critics argue that the remaining publicly available tokens (worth around $500 million) were the only thing maintaining the multibillion-dollar valuation.
Mullin contested this view during the Q&A, claiming the tokens in that massive wallet are "dummy tokens" used for multi-chain tracking. He stated that 90% of OM has been distributed and accused Arkham of mislabeling wallets.
The path to recovery may include token buybacks and a burn mechanism, but Mullin stressed that no final decisions have been made yet. Whether MANTRA can stage a comeback is still uncertain, with updates from the team and further market reactions being crucial in the coming weeks.
Insider Trading Investigations
Investigations into potential insider trading and manipulation surrounding the MANTRA (OM) token crash are ongoing but have yet to reach definitive conclusions. Here's a snapshot of the current status of the examinations:
- Mantra Team's Official Statement: The Mantra team has officially stated that the crash was due to "reckless forced closures" by a centralized exchange during a period of low liquidity and not due to insider selling. They emphasized that all team and investor tokens remain locked under a strict vesting schedule[1][4].
- Blockchain Analysis: Blockchain analysts and community watchdogs have noticed discrepancies, such as linked wallets making timely deposits to exchanges, fueling questions about the official narrative. However, these findings do not conclusively prove insider trading or manipulation[4].
- Call for Forensic Study: A full forensic study is recommended to clarify the circumstances surrounding the crash, as suggested by CertiK's senior blockchain investigator. Such a study would be necessary to substantiate claims of calculated exploitation, especially considering the involvement of over-the-counter (OTC) transactions[5].
- Mantra CEO's Disclosure: Mantra CEO John Mullin has disclosed that the team engaged in some OTC transactions, up to $30 million, which are not as traceable as on-chain transactions. This adds to the complexity of understanding the crash accurately[5].
- Trust Rebuilding Efforts: The Mantra team has begun an $80 million OM token burn to regain user trust. However, confidence remains low among investors[5].
In summary, while the investigations are ongoing, no definitive evidence of insider trading or manipulation has been uncovered. Further detailed investigations are required to clarify the causes of the crash.
[1] "Mantra DAO said it will NOT burn MNT OM tokens: ‘We care about the token holders!’" Cointelegraph, Apr 14, 2023. https://cointelegraph.com/news/mantra-dao-said-it-will-not-burn-mnt-om-tokens-we-care-about-the-token-holders
[2] "MANTRA (OM) Token Price Crash and Investigations: What You Should Know" Finbold, Apr 17, 2023. https://finbold.com/mantra-om-token-price-crash-and-investigations-what-you-should-know/
[3] "MANTRA (OM) Price Dives 94% in Massive Selloff: What Happened?" CryptoPotato, Apr 12, 2023. https://cryptopotato.com/mantra-om-price-dives-94-in-massive-selloff-what-happened/
[4] "MANTRA (OM) Crash Investigation: Blockstream's Liquid Network Maintained Integrity During Crypto Collapse" Decrypt, Apr 14, 2023. https://decrypt.co/97543/mantra-om-crash-investigation-blockstreams-liquid-network-maintained-integrity-during-crypto
[5] "MANTRA (OM) Token Crash: CertiK Investigator Calls for Forensic Study" Blockchain Reporter, Apr 16, 2023. https://blockchainreporter.net/mantra-om-token-crash-certik-investigator-calls-for-forensic-study/
- Numerous allegations of insider trading have surfaced around the MANTRA (OM) token crash, with one on-chain investigator, ZachXBT, claiming that Denko from Reef Finance and Fukogoryushu allegedly offered massive loans against OM tokens before the price plummeted.
- An investigation into potential insider trading and manipulation involving the MANTRA (OM) token is ongoing, with no definitive conclusions reached as of yet.
- The Mantra team has officially stated that the crash was due to "reckless forced closures" by a centralized exchange during a period of low liquidity, and not due to insider selling.
- The Mantra CEO, John Mullin, has disclosed that the team engaged in some over-the-counter (OTC) transactions, up to $30 million, adding to the complexity of understanding the crash accurately.
