Mantra’s OM token suffered a dramatic 90% drop in a matter of hours, triggering waves of speculation and accusations across the crypto space. The massive price movement came without an obvious cause, leading many to draw unsettling parallels to the collapse of Terra’s LUNA token last year.

OM’s price tumbled from over $6 to just above 40 cents between late Sunday and early Monday, during a typically quieter time for the crypto market. Low liquidity hours often magnify price fluctuations, and the outsized volume during the sell-off exacerbated the situation.

In response to the drop, the Mantra team assured its community that the project itself was not to blame. “We want to make it clear that today’s price movement was caused by reckless liquidations, not by any fault of the project,” the team stated in an X post. “This was not our team’s action, and we are looking into what happened. We will share more information as soon as possible.”

Mantra offers a platform for tokenizing real-world assets (RWAs), such as real estate and commodities, allowing for compliant digital investments in physical assets. The OM token is essential for transactions and governance within the platform.

Earlier this year, Mantra formed a partnership with DAMAC Group, a major UAE conglomerate, to tokenize up to $1 billion in assets, spanning sectors like real estate, hospitality, and data centers. OM had been one of the standout performers in 2024, rising more than 400%, drawing the attention of investors despite limited online buzz.

However, co-founder John Patrick Mullin pointed to the possibility of forced liquidations by centralized exchanges as the trigger for the sudden price crash.

“We have identified that the OM price drop was likely triggered by forced closures of positions by centralized exchanges,” Mullin claimed in a post. “The timing and magnitude of the crash suggest that exchanges may have abruptly closed positions without sufficient notice to traders.”

Mullin went on to accuse centralized exchanges of manipulating market conditions to create a specific market reaction.

OM’s futures market recorded a staggering $50 million in liquidations on the long side, setting a new record for the token. Open interest also dropped sharply, from $345 million to just over $130 million, signaling a rapid unwinding of futures positions.

Despite Mullin’s statements, some prominent figures within the crypto community were skeptical of the narrative. Critics took to social media to challenge his claims, casting doubt on the explanation.

Star Xu, the founder of OKX, responded by noting that over $220 million in deposits had been moved to exchanges before the price collapse.

“This situation is a major scandal for the crypto industry,” Xu wrote. “All on-chain data, including unlocks and deposits, is publicly available, and collateral and liquidation data from major exchanges can be analyzed. OKX will make all the reports available to the public.”