The cryptocurrency market has been rocked by a major scandal involving Mantra ($OM) and its co-founder, John Patrick Mullin. On April 13, 2025, an explosive exposé published on X (formerly Twitter) accused Mullin of orchestrating a $5 billion rugpull—one of the most significant in recent history. Within a single hour, the value of the OM token plummeted by 90%, echoing the catastrophic collapse of Terra’s $LUNA in 2022. This incident has ignited widespread alarm, raising serious questions about the integrity of project leadership and governance within the decentralized finance (DeFi) sector.
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The Collapse of $OM: A $5.5 Billion Loss
On April 13, $OM ’s market price fell dramatically from $6 to $0.60 in just one hour, wiping out approximately $5.5 billion in value. The precipitous decline followed allegations that Mullin and the Mantra team had engaged in systematic manipulation of the token’s ecosystem. Accusations include misleading airdrop practices, insider trading, tokenomics manipulation, and fraudulent governance processes.
These events have severely shaken investor confidence, drawing comparisons to previous major failures in the crypto space and raising broader concerns about regulatory oversight and investor protection.
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John Patrick Mullin: The Alleged Architect
At the center of the controversy is John Patrick Mullin, co-founder of Mantra and a prominent figure in the blockchain industry. Mullin had previously promoted an ambitious vision of building a $100 billion total value locked (TVL) chain. Under his leadership, OM briefly climbed into the top 50 cryptocurrencies by market capitalization, attracting a wave of retail investors.
However, the exposé alleges that this success was artificially engineered. Once OM peaked, insiders, including Mullin, allegedly began unloading large quantities of tokens, initiating a cascade of sell-offs. Mullin's public response—where he accepted responsibility while simultaneously reiterating his grandiose goals—was met with widespread criticism, with many viewing it as out of touch with the gravity of investor losses.
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Anatomy of the Alleged Scheme
The exposé outlines a complex series of actions purportedly executed to facilitate the rugpull:
1. Airdrop Bait-and-Switch Tactics
Mantra launched a 50 million $OM airdrop campaign to attract new users, initially allowing 20% of tokens to be unlocked immediately. Subsequent changes to the vesting schedule—first to 0.3% daily, then to a 10% unlock in March 2025, with the remainder locked until 2027—reportedly restricted liquidity for retail investors while insiders retained sellable tokens.
2. Tokenomics Alterations
The OM tokenomics were reportedly changed three times without transparent community input, undermining trust and consolidating control within the core team.
3. Bridge Manipulation
Investors were required to bridge tokens to the MANTRA Chain, which insiders allegedly used as a mechanism to pump the token price. After drawing in late-stage retail interest, insiders are accused of dumping their holdings, precipitating the price crash.
4. Manipulated DAO Governance
Despite branding itself as a decentralized autonomous organization (DAO), Mantra is alleged to have operated under centralized control. Voting on key proposals required staking OM, but fake wallets were allegedly used to skew governance outcomes, allowing the team to manipulate decisions unilaterally.
5. Insider Trading and OTC Deals
On-chain data suggests that a wallet linked to the team transferred 3.9 million $OM to the OKX exchange shortly before the crash. In addition, discounted over-the-counter (OTC) deals were reportedly offered to insiders, who subsequently liquidated their holdings en masse as the token’s price declined.
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Public Reaction and Industry Repercussions
John Mullin’s public statement—“My decision, my responsibility”—has been widely criticized as insufficient. Many argue that his failure to acknowledge the broader impact on retail investors and the market signals a lack of accountability.
The potential ripple effects of the scandal are significant. Given Mantra’s connections to major exchanges like HTX and Poloniex, there is concern that liquidity issues and loss of confidence could result in delistings and broader contagion across the ecosystem.
This incident also highlights a critical vulnerability in DeFi: projects that outwardly promote decentralization while operating under centralized control mechanisms. It raises pressing questions about how investors can better evaluate project integrity before engaging.
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Lessons for Investors
In light of the scandal, industry experts urge investors to adopt more rigorous due diligence practices. Suggested actions include:
Reporting the incident to major exchanges and requesting a review or delisting of $OM.
Raising awareness across social platforms to prevent others from falling victim.
Scrutinizing governance models, tokenomics, and leadership credibility before investing.
Avoiding projects that rely heavily on hype or vague promises of decentralization.
Some community members have suggested shifting focus toward memecoins for speculative gains, though this comes with its own set of risks and volatility.
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A Call for Reform and Vigilance
The Mantra scandal serves as a sobering reminder of the persistent risks in the cryptocurrency space. While DeFi holds promise for a more open and equitable financial system, the lack of transparency and accountability in some projects poses a significant threat to investor confidence and long-term viability.
This episode underscores the importance of project transparency, genuine decentralization, and informed investor participation. As the industry evolves, such cautionary tales may ultimately help build a more robust and trustworthy crypto ecosystem—provided their lessons are not ignored.
