Mantra’s OM token collapsed by more than 90% overnight, and the crypto world can’t agree on why. On April 13, OM’s price plummeted from over $6 to below $0.50, wiping out more than $5 billion in market cap and triggering widespread panic across the crypto industry.

The sudden crash drew comparisons to Terra’s LUNA implosion as traders scrambled for answers. Unverified rumors of insider dumping, forced liquidations, mislabeled wallets and exchange manipulation quickly spread — but Mantra insists it was caught in the middle.

Mantra had built a strong position in the real-world asset tokenization narrative heading into April 13, backed by a $1-billion deal to tokenize Dubai-based Damac Group’s real estate and data centers. It secured a Virtual Assets Regulatory Authority (VARA) license in Dubai and launched a $108-million ecosystem fund with support from heavyweights such as Laser Digital, Shorooq, Amber Group and Brevan Howard Digital. In February 2025, the OM token hit an all-time high of nearly $9.

But on April 13, that momentum was violently interrupted. The hours that followed painted a messy picture of token transfers, insider speculation and shifting blame. Here’s a detailed look at how the OM collapse played out.

24 hours of the Mantra OM fiasco

April 13 (16:00–18:00 UTC)

Mantra’s OM token was trading sideways throughout the day. It dropped from $6.14 to $5.52 during this two-hour window.

April 13 (18:00–20:00 UTC)

The token suddenly fell to $1.38 in the first hour, then to as low as $0.52 in the next — losing over 90% of its value in a single day. Social media erupted with theories, including a rug pull, insider dumping, forced liquidation or exchange manipulation.

April 13 (20:00–22:00 UTC)

Early speculation surrounded a rug pull, sparked by a screenshot of a deleted Telegram channel. This was later debunked, as the deleted group was not Matra’s official channel. Cointelegraph has confirmed that the project’s Telegram is active at the time of writing.

Mantra shared its first statement on X, but the brief update was met with immediate backlash from the community.

April 13 (22:00–00:00 UTC)

Mantra co-founder and CEO John Patrick Mullin posted a more detailed statement on X, claiming OM’s market action was 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,” Mullin said.

“That this happened during low-liquidity hours on a Sunday evening UTC (early morning Asia time) points to a degree of negligence at best, or possibly intentional market positioning taken by centralized exchanges.”

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April 14 (00:00–02:00 UTC)

In the days leading up to the crash, at least 17 wallets had deposited a total of 43.6 million OM (worth $227 million) into Binance and OKX, according to blockchain tracker Lookonchain.

Two of these wallets were labeled as belonging to Laser Digital, a strategic Mantra investor, by blockchain data platform Arkham Intelligence. The label triggered further speculation and allegations against Laser Digital. At the time of writing, the accuracy of Arkham’s labels has not been confirmed, and the platform has not responded to Cointelegraph’s request to clarify.

Meanwhile, Mullin replied to community questions under his X post, suggesting internal findings pointed to one exchange as the main cause of the collapse while stating that it was not Binance.

April 14 (02:00–05:00 UTC)

Both Binance and OKX responded to the situation. Binance said, “Binance is aware that $OM, the native token of MANTRA, has experienced significant price volatility. Our initial findings indicate that the developments over the past day are a result of cross-exchange liquidations.”

OKX CEO Star Xu posted on X, “It’s a big scandal to the whole crypto industry. All of the onchain unlock and deposit data is public, all major exchanges’ collateral and liquidation data can be investigated. OKX will make all of the reports ready!”

OKX stated, “Following the incident, we have conducted investigations and identified major changes to the MANTRA token’s tokenomics model since Oct 2024, based on both publicly available on-chain data and internal exchange data.

“Our investigation also uncovered that several on-chain addresses have been executing potentially coordinated large-scale deposits and withdrawals across various centralized exchanges since Mar 2025.”

April 14 (05:00–12:00 UTC)

Laser Digital denied ownership of the wallets tagged by Arkham and reported by Lookonchain, calling them mislabeled.

“We want to be absolutely clear: Laser has not deposited any OM tokens to OKX. The wallets being referenced are not Laser wallets,” the company said on X, sharing three token addresses to support its claim that no sales had occurred.

Lookonchain also identified another wallet using Arkham data that had remained dormant for a year before becoming active just hours before the crash. The wallet was labeled as belonging to Shane Shin, a founding partner of Shorooq Partners, and received 2 million OM shortly before the collapse.

April 14 (12:00–13:00 UTC)

Mullin joined Cointelegraph’s Chain Reaction show and denied reports that key Mantra investors dumped OM before the collapse. He dismissed allegations that the team controlled 90% of the supply.

“I think it’s baseless. We posted a community transparency report last week, and it shows all the different wallets,” Mullin said, noting the dual-token setup across Ethereum and the Mantra mainnet. Additionally, he reassured users that OM token recovery is the team’s primary concern. 

“We’re still in the early stages of putting together this plan for a potential buyback of tokens,” he said. 

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April 14 (13:00–16:00 UTC)

More theories started emerging. Onchain Bureau claimed market makers at FalconX were responsible for the price crash. They blamed it on the loan option model — a service allowing market makers to borrow tokens and execute guaranteed purchases at contract expiry.

“Instead of paying the market maker with a monthly retainer fee, they had a contract signed saying that they would be able to enforce a buy of, for example, 1M tokens at $1 by contract expiry. Clearly, when the contract expired, they enforced the contract and made their bags,” Onchain Bureau said in a now-deleted X post.

Shortly afterward, Onchain Bureau followed up, saying FalconX had reached out and denied being Mantra’s market maker. Mullin also responded to the post, stating that FalconX was not the project’s market maker. He described them instead as a trading partner.

Meanwhile, crypto detective ZachXBT weighed in, claiming that individuals linked to Reef Finance had allegedly been seeking massive OM-backed loans in the days leading up to the crash.

What we know of the OM crash

Several theories have been thrown around. Initial fears ranged from a rug pull to insider trading, which Mantra has denied in several instances by sharing wallet addresses. The team has responded to online comments and media inquiries to assure that they haven’t run away.

Mantra has also denied that the price collapse was a result of an expiring deal with market maker FalconX. Some fingers were pointed toward Laser Digital, which said it is a result of mislabeling at Arkham Intelligence. 

Arkham Intelligence has not responded to Cointelegraph’s request to clarify its labels. However, the Laser Digital tags on Arkham are a low-confidence prediction made by an AI model, not a verified entity with a blue checkmark.

In the days following the OM crash, Mullin stated that he would burn all of his team’s tokens. He later said that he would start by putting his own allocation on the line.

Mullin announced that Mantra would publish a post-mortem and followed with a “statement of events” on April 16. The team reiterated that no project-led token sales occurred and that all team allocations remain locked. The statement doubled down on Mantra’s plan to introduce a token buyback and burn program but lacked new information on the cause of the crash.

Mullin told Cointelegraph that Mantra has tapped an unnamed blockchain analyst to investigate the underlying cause of the crash, though details remain confidential at this time.

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The post How Mantra’s OM token collapsed in 24 hours of chaos appeared first on Crypto Spyder.

The right market maker can be a launchpad for a cryptocurrency project, opening the door to major exchanges and providing valuable liquidity to ensure a token is tradeable — but when the wrong incentives are baked into the deal, that market maker can become a wrecking ball.

One of the most popular and misunderstood offerings in the market-making world is the “loan option model.” This is when a project lends tokens to a market maker, who then uses them to create liquidity, improve price stability, and help secure listings at a cryptocurrency exchange. In reality, it has been a death sentence for many young projects.

But behind the scenes, a number of market makers is using the controversial token loan structure to enrich themselves at the expense of the very projects they’re meant to support. These deals, often framed as low-risk and high-reward, can crater token prices and leave fledgling crypto teams scrambling to recover.

“How it works is that market makers essentially loan tokens from a project at a certain price. In exchange for those tokens, they essentially promise to get them on big exchanges,” Ariel Givner, founder of Givner Law, told Cointelegraph. “If they don’t, then within a year, they repay them back at a higher price.”

What often happens is that market makers dump the loaned tokens. The initial sell-off tanks the price. Once the price has cratered, they buy the tokens back at a discount while keeping the profit.

Source: Ariel Givner

“I haven’t seen any token really benefit from these market makers,” Givner said. “I’m sure there are ethical ones, but the bigger ones I’ve seen just destroy charts.”

The market maker playbook

Firms like DWF Labs and Wintermute are some of the best-known market makers in the industry. Past governance proposals and contracts reviewed by Cointelegraph suggest that both firms proposed loan option models as part of their services — though Wintermute’s proposals call them “liquidity provision” services.

DWF Labs told Cointelegraph that it doesn’t rely on selling loaned assets to fund positions, as its balance sheet sufficiently supports its operations across exchanges without relying on liquidation risk. 

“Selling loaned tokens upfront can damage a project’s liquidity — especially for small- to mid-cap tokens — and we’re not in the business of weakening ecosystems we invest in,” Andrei Grachev, managing partner of DWF Labs, said in a written response to Cointelegraph’s inquiry.

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While DWF Labs emphasizes its commitment to ecosystem growth, some onchain analysts and industry observers have raised concerns about its trading practices.

Wintermute did not respond to Cointelegraph’s request for comment. But in a February X post, Wintermute CEO Evgeny Gaevoy published a series of posts to share some of the company’s operations with the community. He bluntly stated that Wintermute is not a charity but in the “business of making money by trading.” 

Source: Evgeny Gaevoy

What happens after the market maker gets the tokens?

Jelle Buth, co-founder of market maker Enflux, told Cointelegraph that the loan option model is not unique to the well-known market makers like DWF and Wintermute and that there are other parties offering such “predatory deals.”

“I call it information arbitrage, where the market maker very clearly understands the pros and cons of the deals but is able to put it such that it’s a benefit. What they say is, ‘It’s a free market maker; you don’t have to put up the capital as a project; we provide the capital; we provide the market-making services,’” Buth said.

On the other end, many projects don’t fully understand the downsides of loan option deals and often learn the hard way that they weren’t built in their favor. Buth advises projects to measure whether loaning out their tokens would result in quality liquidity, which is measured by orders on the book and clearly outlined in the key performance indicators (KPIs) before committing to such deals. In many loan option deals, KPIs are often missing or vague when mentioned.

Cointelegraph reviewed the token performance of several projects that signed loan option deals with market makers, including some that worked with multiple firms at once. The outcome was the same in those examples: The projects were left worse off than when they started.

Six projects that worked with market makers under the loan option agreement tanked in price. Source: CoinGecko

“We’ve worked with projects that were screwed over after the loan model,” Kristiyan Slavev, co-founder of Web3 accelerator Delta3, told Cointelegraph.

“It’s exactly the same pattern. They give tokens, then they’re dumped. That’s pretty much what happens,” he said.

Not all market-maker deals end in disaster

The loan option model isn’t inherently harmful and can even benefit larger projects, but poor structuring can quickly turn it predatory, according to Buth.

A listings adviser who spoke to Cointelegraph on the condition of anonymity echoed the point, emphasizing that outcomes depend on how well a project manages its liquidity relationships. “I’ve seen a project with up to 11 market makers — about half using the loan model and the rest smaller firms,” they said. “The token didn’t dump because the team knew how to manage price and balance the risk across multiple partners.”

The adviser compared the model to borrowing from a bank: “Different banks offer different rates. No one runs a money-losing business unless they expect a return,” they said, adding that in crypto, the balance of power often favors those with more information. “It’s survival of the fittest.”

But some say the problem runs deeper. In a recent X post, Arthur Cheong, founder of DeFiance Capital, accused centralized exchanges of feigning ignorance of artificial pricing fueled by token projects and market makers working in lockstep. “Confidence in the altcoin market is eroding,” he wrote. “Absolutely bizarre that CEXs are turning an absolute blind eye to this.”

Still, the listings adviser maintained that not all exchanges are complicit: “The different tier exchanges are also taking really extreme actions against any predatory market makers, as well as projects that might look like they rugged. What exchanges do is they actually immediately lock up that account while they do their own investigation.”

“While there is a close working relationship, there is no influence between the market maker and the exchange of what gets listed. Every exchange would have their own due diligence processes. And to be frank, depending on the tier of the exchange, there is no way that there would be such an arrangement.”

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Rethinking market maker incentives

Some argue for a shift toward the “retainer model,” where a project pays a flat monthly fee to a market maker in exchange for clearly defined services rather than giving away tokens upfront. It’s less risky, though more expensive in the short term.

“The retainer model is much better because that way, market makers have incentives to work with the projects long term. In a loan model, you get, like, a one-year contract; they give you the tokens, you dump the tokens, and then one year after that, you return the tokens. Completely worthless,” Slavev said.

While the loan option model appears “predatory,” as Buth put it, Givner pointed out that in all these agreements, both parties involved agree to a secure contract.

“I don’t see a way that, at this current time, this is illegal,” Givner said. “If somebody wanted to look at manipulation, that’s one thing, but we’re not dealing with securities. So, that gray area is still there in crypto — [to] some extent the Wild West.”

The industry is becoming more aware of the risks tied to loan option models, especially as sudden token crashes increasingly raise red flags. In a now-deleted X post, onchain account Onchain Bureau claimed that a recent 90% drop in Mantra’s OM token was due to an expiring loan option deal with FalconX. Mantra denied the claim, clarifying that FalconX is a trading partner, not its market maker.

Edited LinkedIn copy of Onchain Bureau’s LinkedIn post. Source: Nahuel Angelone

But the episode highlights a growing trend: The loan option model has become a convenient scapegoat for token collapses — often with good reason. In a space where deal terms are hidden behind NDAs and roles like “market maker” or “trading partner” are fluid at best, it’s no surprise the public assumes the worst.

“We’re speaking up because we make money off the retainer model, but also, this [loan option model] is just killing projects too much,” Buth said.

Until transparency and accountability improve, the loan option model will remain one of crypto’s most misunderstood and abused deals.

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