Mantra Chain, the Layer one tokenization platform, regulated in the UAE by Dubai’s Virtual Asset Regulatory Authority, has shed almost $10 billion dollars in less than 24 hours on April 13th 2025. The OM token price dropped from around $6 dollars to 0.37 in a matter of hours.
The incident reminded many of FTX, Luna, and other failed projects that were either ponzy scams or worse, but until now there are many sides to the story and many fingers assigning blame and culprit status.
So what has happened?
The Mantra Chain side of story
John Patrick Mullin, the CEO and Co-Founder of Mantra was quick to make a statement on X and LinkedIn what happened. He noted that they had determined that the $OM Token market movements were triggered by reckless force closures initiated by centralized exchanges on OM account holders.
He stated, “The timing and depth of the crash suggest that a very sudden closure of account positions was initiated without sufficient warning or notice. 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.”
He noted that Centralized exchange partners play an important role in providing liquidity to projects like ours. He explained, “We work closely with them; however they continue to exercise enormously high levels of discretion. When discretionary powers are exercised without due internal and external oversight, dislocations like what recently happened can and will occur, hurting both projects and investors alike.”
He was adamant that the dislocation was not caused by the team, or Mantra Association, or advisors or investors. He explained, “Tokens remain locked and subject to the published vesting periods. OM’s Tokenomics remain intact, as shared last week in our latest token report. Our token wallet addresses are online and visible.”
He added that in the coming hours there will be a community meeting on X to discuss the events.
Crypto exchanges side of story
The Founder and CEO of OKX sees it quite differently, on X he noted, “ 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!”
He also shared a post which noted that before the $OM token crash, 17 wallets deposited $277 million ( 43.6 million $OM) to exchanges, which is 4.5% of circulating supply. Two of those wallets are linked to Laser Digital an investor and partner of Mantra Chain.
In March 2024 MANTRA Chain raised $11 million led by UAE based Shorooq Partners with investors including Three-point capital, Forte Securities, VirtuZone, Hex Trust and GameFi Ventures
While it seems the CEO of Mantra Chain mostly blames Binance. Binance issued a statement stating that the $OM Token had experienced price volatilities and their initial findings indicate that the development are a result of cross-exchange liquidations. Since October 2024 Binance had implemented various risk control measures including reducing leverage levels with regards to $OM Token.
Additionally, since January 2025, Binance introduced a pop-up warning on the OM spot trading page to inform users of major changes in the token’s Tokenomics, particularly a significant increase in supply. That warning has now been updated to emphasize that OM’s price is subject to very high volatility.
The Community take on the Story
Being_maximus expressed what he believes is the community take on the events with $OM Token, he explained that the community believes this could be linked to a team Shake-Up: Rumors of key “Kabal team” resignations rocked investor confidence, triggering panic selling, Tokenomics Concerns, allegations surfaced that the team controls up to 90% of the token supply, raising fears of insider selling and manipulation. A proposal for supply inflation only added fuel to the fire, and Airdrop Discontent: Community members (“Omies”) expressed frustration over poor airdrop allocations and vesting terms. OTC sales by insiders may have worsened the sell pressure.
Investors have reached out to Mantra Chain and Binance, with one stating on X “I invested $3,500,000 into your RWA token, $OM. That investment is now worth barely $200,000, a drop of over 90%. My intention was to support the future of RWAs. I conducted thorough due diligence, and the supposed partnership with a leading UAE property company was a key factor in my investment decision — a claim that gave the illusion of credibility and legitimacy.”
He added that it is clear that these funds were funneled into the pockets of the Binance and $OM Teams. As he stated,, “It’s now clear that those funds were funneled into the pockets of the Binance and $OM teams in what looks like a well orchestrated liquidity exit. Had I known that my investment would be used to subsidize insiders instead of advancing the RWA ecosystem, I never would’ve engaged with this project. If this situation is not acknowledged and addressed appropriately, I will have no choice but to escalate this through formal legal channels. My crypto legal representatives at Burwick Law will be in touch.”
The Dubai Virtual Asset Regulatory Authority take
The most important take will be that of the UAE regulator VARA given that Mantra Chain is regulated in the UAE. Lara on the Block reached out, and was advised that no comments could be made at this time as investigations are ongoing.
The whole situation reminds us of a recent spat that took place in the UAE, a few weeks back between UAE based Dohrnii Labs, and Blynex crypto exchange.
But it could also be a reminder to the sagas of FTX, when VARA had to suspend its license.
