This week's MANTRA Meltdown has left the crypto market and regulators seeking answers.

The loss of 90% of value from the OM token stunned the market during Sunday trading. Now, amid a flurry of social media accusations, highlighted by chain evidence

This week's MANTRA (OM) meltdown has left the crypto market and regulators searching for answers after the token lost 90% of its value.

As the dust settles on the events of Sunday trading, a bigger picture is forming from a flurry of social media accusations, highlighted by chain evidence. One that seems to indicate more than just bad luck. Here's what you need to know.

What Is MANTRA (OM)? The RWA-Focused Blockchain Explained

MANTRA (OM +38.78%) entered the market as a Layer 1 blockchain to support the Real World Assets (RWA) ecosystem. The tokenization of real-world assets refers to bringing non-chain items onto the blockchain. In some instances, this could mean making the ownership of an item or asset a token.

The RWA space continues to expand, and MANTRA was touted as an enterprise-level solution to the market. However, it now looks like there may have been alternative motives as evidence continues to stack up against the platform's developers and community members.

Why Did the MANTRA (OM) Token Crash 90% Overnight?

The dust has begun to settle on the MANTRA token crash that saw the OM token drop from $6.30 down to $0.38 in less than 24 hours. The abruptness and size of these losses have left social media sleuths and crypto analysts speculating on foul play. Considering that the developers and their partners held the majority of the tokens, these allegations are warranted.

Main Causes Behind the MANTRA (OM) Token Collapse

Several reasons have led to the MANTRA meltdown that is known so far. For one, the overuse of trading bots has made instances like this more common. These automated protocols carry out trades at predetermined values. As such, they can be triggered by sudden market movements. Sadly, these bots can easily trigger a wave of selloffs.

High-Risk Loans Fueled the OM Token Meltdown

According to exchange records, the MANTRA token holders had made some questionable maneuvers in the days leading up to the crash. It was noted that the group had taken out several high-risk loans using the OM token as collateral. This situation meant that as OM tokens began to sell, their lenders called the loans in to meet the new collateral requirements, furthering the OM death spiral.

After a period of stability, the OM token began to drop rapidly as several large liquidity providers began dumping the token on exchanges. In the days leading up to the crash, the token dropped 20% to $5.

From there, a 90% drop saw the token fall to lows of $0.38 before it began to recover slightly. However, despite bouncing back to $1.26 at the time of writing, these losses have caused significant investor frustration.

Many believe that the company and its partners were involved in insider trading. However, the CEO, John Mullin, denied reports suggesting that anything nefarious was behind the sudden losses.

This denial has been met with skepticism as blockchain analysts pointed out that the two main culprits in the crash, Laser Digital and Shorooq, were investors in the MANTRA Ecosystem Fund (MEF). Notably, the fund secured $109 million since it was announced in April.

Source – X

Laser Digital

Laser Digital, backed by Nomura, has been a strategic partner of MANTRA since May 2024. The group provided support to the project and held a significant portion of OM tokens before the crash.

What makes the situation precarious is that right before the crash, it’s alleged that Laser Digital moved $227M in OM tokens to the CEXs Binance (BNB) and OKX. In total, 43.6 million OM tokens were moved from wallets that are allegedly controlled by Laser Digital.

In addition to this, another independent source, ZachXBT, has shared evidence of a sharp uptick in OM-collateralized loan requests by connected wallets prior to the crash.

Shorooq Partners

Shorooq Partners is another MANTRA investor that allegedly made some questionable maneuvers prior to the losses. According to LookonChain data, a wallet that was tied to the company’s founding partners, Shane Shin, received a transfer equaling 2M OM tokens on April 13, just hours before the crash.

In response to these allegations, Shorooq Partners stated that these were wallet-to-wallet transfers within their community.

Did MANTRA Plan the Crash? Token Supply and Inflation Moves

There are others who say this scam has been in the works for some time. They noted that back in October 2024, MANTRA doubled the total supply of tokens. This maneuver raised the token total from 888,888,888 to 1,777,777,777 OM tokens. Additionally, they eliminated