The Mantra token suffered a stunning collapse on April 13, plunging more than 90% within hours. From a price of $6.30, it nosedived to just $0.37, wiping out over $5 billion in market value. This meltdown immediately triggered comparisons to past disasters like LUNA and FTX. Some traders even called it the biggest rug pull since Terra’s infamous fall. What made the crash worse was the silence from the Mantra team during the early hours of the drop. Investors panicked as liquidations piled up and rumors flew. A few even suspected that the team had dumped tokens or defaulted on loans. At that time, no one had clear answers.
John Mullin Denies Rug Pull, Blames Crypto Exchange Liquidations
In response, Mantra co-founder John Mullin came forward to reject the rug pull claims. According to him, the crash was not caused by the team but by forced liquidations triggered by centralized crypto exchanges. He suggested that at least one exchange executed sudden closures on OM token holders without warning. Mullin emphasized that this happened during low-volume trading hours, amplifying the price impact. He claimed that no loans were taken by the Mantra team and that their token reserves remained untouched and locked. He also clarified that Binance wasn’t the exchange responsible. Still, blockchain data showed millions of OM tokens moving to exchanges just days before the crash. While that raised eyebrows, Mullin promised more transparency through upcoming community updates.
Sherpas, OMies, and broader crypto community,
First off, the team and I greatly appreciate the support that we have received over the past several hours, which we believe is a testament to the strong support MANTRA has among its investors and community.
We have determined that…
— JP Mullin (🕉, 🏘️) (@jp_mullin888) April 13, 2025
Binance Joins the Mantra Crash Conversation
Binance eventually broke its silence with a public update on April 14. The crypto exchange confirmed the crash was driven by cross-exchange liquidations and not internal fraud. It stated that recent changes to Mantra’s tokenomics had increased risk. Specifically, the total OM supply doubled in October 2024 and transitioned to an inflationary model. Binance claimed it had already reduced leverage and issued warnings to users about OM’s new risk profile. According to on-chain trackers, 17 wallets moved over $227 million in OM to exchanges before the collapse. Those moves, combined with liquidations, led to a violent sell-off. Binance’s explanation helped explain the crash, but it didn’t repair the damage.
Mantra Rebounds 200%, but Skepticism Remains
After bottoming out, the Mantra token staged a strong bounce, jumping more than 200% in less than a day. The rebound followed public efforts by Mullin and the team to calm fears and offer on-chain proof that their holdings remain untouched. OM traded as high as $1.10 before slipping again, but the short-term gain gave some traders hope. However, many remain cautious. Analysts noted that the rebound mirrors LUNA’s false recovery in 2022. Technical charts show OM failing to reclaim key levels, and the RSI suggests weakness. OKX CEO Star Xu even called the situation a “big scandal,” hinting at more revelations to come. Trust in the project is still shaky.
What the Mantra Crash Means for Crypto Exchange Risks
The Mantra collapse exposed deep issues in how centralized crypto exchanges manage liquidations. Forced closures without warning created a chain reaction, killing a $6 billion market cap in hours. Even with Binance issuing warnings and adjusting risk tools, it wasn’t enough to protect investors. Mullin insists the project remains solid, but with so much of OM’s supply controlled by a small group, concerns about future manipulation persist. This event shows that even well-known projects with big-name partners can fall apart fast. For the crypto space, the Mantra crash is another reminder that transparency, smart tokenomics, and exchange safeguards are not optional—they’re critical.
