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Mantra OM Collapse (April 2025)

DOCUMENT STATUS // PENDING REVIEW

This document was created on 2026-01-09, and has not yet been reviewed.

⊙ generated by robots | curated by humans

On April 13, 2025, Mantra's OM token collapsed 92% in hours—from $6.21 to under $0.50—wiping out over $5 billion in market cap. The crash occurred on a Sunday evening UTC when liquidity was thin, triggered by exchange risk teams acting on concerns about manipulated metrics and circular lending schemes.

The collapse exposed how projects and market makers can inflate the appearance of liquidity while creating fragile structures that shatter under stress.

Summary

  • OM token crashed 92% in hours on April 13, 2025 (Sunday evening UTC)
  • Over $5 billion in market cap evaporated
  • OKX alleged Mantra inflated price using USDT loans collateralized by OM tokens
  • Mantra blamed "reckless forced liquidations" by centralized exchanges
  • Multiple market makers denied being Mantra's official MM
  • Circulating supply and volume metrics were allegedly misrepresented
  • Token trades around $0.07 as of late 2025—a 99% decline from peak

Background

Mantra (OM)

Mantra is a Layer 1 blockchain focused on real-world asset (RWA) tokenization. The project positions itself as regulatory-compliant infrastructure for bringing traditional assets on-chain.

The OM token serves as the network's native token for staking, governance, and transaction fees. Prior to the collapse, OM had appreciated significantly, reaching an all-time high above $6.

Pre-Crash Conditions

In the weeks before the collapse, several warning signs emerged:

INDICATOR OBSERVATION
Price appreciation OM up ~500% in months
Volume concentration Heavy trading on specific venues
Thin order books Limited depth outside top exchanges
Weekend timing Crash occurred Sunday evening UTC

Timeline of Collapse

timeline
    title OM Token Collapse - April 13, 2025
    section Sunday Evening UTC
        ~18.00 : OM trading at $6.21, no obvious catalyst
        ~19.00 : OKX risk team freezes accounts, citing concerns
        ~19.30 : Forced liquidations begin across platforms
        ~20.00 : Cascading liquidations as collateral calls trigger
        ~21.00 : OM price below $1.00
        ~22.00 : OM bottoms near $0.49, 92% down
    section Aftermath
        Apr 14 : Mantra blames exchanges, OKX counters with allegations
        Apr 15 : Market makers deny MM relationship
        Apr 16+ : Investigations, token burns announced

The Trigger

The crash began when OKX's risk management team froze accounts associated with Mantra. OKX alleged that Mantra had been:

  1. Taking USDT loans collateralized by OM tokens
  2. Using borrowed USDT to buy more OM (creating circular price support)
  3. Misrepresenting circulating supply figures
  4. Inflating trading volume through self-dealing

When OKX froze the accounts, it broke the circular support structure.

The Cascade

Once OKX acted, other venues followed:

graph TD
    OKX["OKX freezes accounts"] --> LIQ1["Positions liquidated on OKX"]
    LIQ1 --> PRICE["OM price drops"]
    PRICE --> MARGIN["Margin calls on other venues"]
    MARGIN --> LIQ2["Cascading liquidations"]
    LIQ2 --> BOOK["Order books emptied"]
    BOOK --> FREEFALL["Free-fall: no bids"]
    FREEFALL --> BOTTOM["92% crash in ~3 hours"]

    style OKX fill:#FF6B6B
    style BOTTOM fill:#FF6B6B

Figure 1: The liquidation cascade.

The Sunday timing was particularly devastating. Liquidity is typically thinnest during weekend evenings. With market makers offline and order books thin, there were no bids to absorb the selling.

The Allegations

OKX's Claims

OKX alleged that Mantra had engaged in price manipulation through circular lending:

ALLEGATION MECHANISM
Circular collateralization Borrow USDT using OM as collateral, buy more OM
Supply misrepresentation Claimed circulating supply lower than actual
Volume inflation Self-reported metrics didn't match on-chain reality
Artificial price support Price maintained by circular buying, not organic demand

Mantra's Response

Mantra denied wrongdoing and blamed exchanges:

"The OM market movements were triggered by reckless forced liquidations initiated by centralized exchanges on OM account holders."

Mantra claimed:

  • Large holders were forced to liquidate due to changes in margin requirements
  • Exchanges acted without proper notice
  • The crash was external, not caused by project actions

Market Maker Confusion

Initial reports named FalconX as Mantra's market maker. FalconX denied this, stating they were not Mantra's market maker. The actual market maker relationship remained unclear, with multiple firms denying involvement.

This confusion itself was telling—legitimate projects typically have clear, disclosed market maker relationships.

Anatomy of the Fraud (Alleged)

The Circular Support Structure

graph LR
    subgraph "The Loop"
        OM["OM Tokens"] -->|"Collateral"| LOAN["USDT Loan"]
        LOAN -->|"Used to buy"| MORE["More OM"]
        MORE -->|"Increases"| PRICE["OM Price"]
        PRICE -->|"Increases value of"| OM
    end

    BREAK["OKX Freeze"] -->|"Breaks loop"| COLLAPSE["Cascade"]

    style BREAK fill:#FF6B6B
    style COLLAPSE fill:#FF6B6B

Figure 2: The alleged circular price support mechanism.

The structure works as follows:

  1. Entity deposits OM tokens as collateral
  2. Borrows stablecoins (USDT) against the collateral
  3. Uses borrowed USDT to purchase more OM on spot markets
  4. This buying pressure increases OM price
  5. Higher OM price increases collateral value
  6. Higher collateral allows larger borrows
  7. Repeat

This creates artificial price appreciation that looks like organic demand. The problem: it's inherently unstable. Any disruption to the loop causes collapse.

Supply Obfuscation

Healthy price discovery requires accurate information about circulating supply. If investors believe supply is 1 billion tokens but actual circulating supply is 2 billion, the market cap calculation is wrong and price discovery is impaired.

Mantra allegedly:

  • Reported circulating supply figures that didn't match on-chain data
  • Obscured token distributions across wallets
  • Made it difficult to verify actual available supply

Damage Assessment

Price Impact

METRIC VALUE
Pre-crash price $6.21
Crash low ~$0.49
Decline 92%
Market cap destroyed ~$5.4 billion
Current price (late 2025) ~$0.07
Total decline from peak 99%

Recovery Attempts

Mantra announced recovery measures:

  • Founder committed to burning 150 million OM tokens
  • Team committed to burning additional 150 million tokens
  • Total burn: 300 million tokens

As of late 2025, these measures have not restored price or trust. OM remains down 99% from its peak.

Lessons

The Liquidity Illusion

The OM collapse demonstrated that visible metrics can be manufactured:

METRIC WHAT IT APPEARED REALITY
Price Organic appreciation Circular support
Volume Active trading Self-dealing
Market cap $5B+ project Inflated denominator
Liquidity Tradeable at scale Vanished under stress

Warning Signs

Retrospectively, the warning signs were present:

  • ☒ Extreme price appreciation without clear catalyst
  • ☒ Unclear market maker relationships
  • ☒ Supply figures that couldn't be independently verified
  • ☒ Weekend timing of maximum vulnerability
  • △ RWA narrative used to attract institutional interest

Due Diligence Framework

For evaluating token projects:

  1. Verify supply on-chain — Don't trust self-reported figures
  2. Check market maker disclosure — Legitimate projects disclose
  3. Analyze volume patterns — Look for wash trading signatures
  4. Test liquidity depth — Small sells reveal true depth
  5. Question rapid appreciation — What's driving it?

Regulatory Response

The OM collapse occurred alongside the MOVE scandal, creating pressure for regulatory action on market maker practices.

Industry Impact

  • Multiple exchanges reviewed listing requirements
  • Market maker disclosure policies under consideration
  • On-chain verification of supply metrics discussed

As of early 2026:

  • No criminal charges publicly announced
  • SEC and other regulators reportedly reviewing
  • Civil litigation by affected investors possible

Comparison: OM vs. MOVE

The OM and MOVE collapses occurred within months of each other, both involving market maker manipulation:

ASPECT MOVE OM
Mechanism Coordinated dump after listing Circular collateralization
Timing Day after listing Sunday evening
Warning time Hours Hours
Decline ~40% initial 92%
Market maker involvement Documented Denied by all parties
Recovery Minimal None

Both scandals revealed that crypto's market maker ecosystem operates with conflicts of interest that traditional markets prohibit.

References

Primary Reporting

Exchange Statements

Analysis

Changelog

DATE AUTHOR NOTES
2026-01-09 Artificial. Generated by robots.
? ? Reviewed, edited, and curated by humans.