Insider Manipulation Linked to the Collapse of Mantra Token, Experts Reveal

The team behind the RWA project, Mantra, along with partner market makers, has been accused of manipulating liquidity metrics of the plummeting OM token. This perspective was shared during the Chopping Block podcast on the Unchained YouTube channel.

On April 13, the price of OM dropped by approximately 90% in a very short time frame, resulting in a total market capitalization loss of around $5.5 billion.

Experts believe that the manipulation involved skewing the token’s market indicators. Market makers executed numerous sham transactions between controlled addresses to create a façade of trading activity and inflate trading volumes.

Consequently, OM ranked among the top 25 cryptocurrencies by market cap, even though estimates suggested that less than 1% of the tokens were genuinely liquid.

Prior to the price collapse, the total circulating value of OM exceeded $6 billion, while the amount of funds locked in the protocol was just over $15 million.

Hasib Qureshi, managing partner at Dragonfly, pointed out that the manipulation tactics relied on flaws in the validation processes of services like CoinGecko and CoinMarketCap. Both data aggregators largely depend on information provided by projects and reference coin listings on exchanges, alongside fundamental on-chain analytics.

However, interested parties can circumvent these checks. By distributing tokens among market makers, they create an illusion of trading activity and even simulate substantial participation from retail investors.

The fabricated liquidity of OM collapsed when a major holder attempted to liquidate their position. This incident exposed the actual depth of the asset’s market, which turned out to be nonexistent, experts highlighted.

In their view, potential solutions to this issue may include:

Discussion participants acknowledged that market makers may not be incentivized to disclose information, and implementing rules for exchanges could incur additional expenses.

Let’s also recall that researchers from OddEyeResearch similarly concluded that insiders were manipulating the price of OM. They suggested that the token’s crash was triggered by one of them breaking a conspiracy.