Source: The Block

The Layer 1 blockchain MANTRA, focused on real-world assets, saw its token $OM plummet 90% in just a few hours on Sunday, raising market concerns about a potential rug pull or major hacking incident.

"Today's event was triggered by reckless liquidations and is unrelated to the project itself," MANTRA's X account wrote a few hours after the crash began.

MANTRA's co-founder stated on X: "The forced liquidation from a large OM investor on the [centralized exchange] was too significant."

A leader of the MANTRA community denied in the project's Telegram group that the crash was caused by team sell-offs, but shortly after, the group became inaccessible.

The project's co-founder John Patrick Mullin previously dismissed allegations that the MANTRA team controlled the majority of the circulating supply of $OM tokens.

$OM tokens have been traded since August 2020, and on Sunday, the price plummeted dramatically, crashing over 90%, as investors rushed to assess the aftermath. According to The Block's MANTRA price page, the token dropped about 10% between 5:20 PM and 6:20 PM UTC, then suddenly fell from $5.21 to around $0.50, experiencing an astonishing 90% crash in just 90 minutes.

Community leader Dustin McDaniel downplayed the accusations of potential sell-offs by the MANTRA team in a lengthy Telegram message, admitting that he was unaware of the situation before the team had time to investigate the price drop.

MANTRA's X account posted an update on Sunday night at 8:51 PM. The team stated: "Today's event was triggered by reckless liquidations and is unrelated to the project itself."

Mullin pointed out a "forced liquidation from a large OM investor on CEX" and mentioned in his post, "We are still working out the details, but we are here, and we are addressing this issue."

MANTRA had previously faced allegations of controlling a large portion of the circulating supply of tokens in an attempt to manipulate token prices. In his response on X, Mullin dismissed these allegations, stating: "OM has been in circulation since August 2020, longer than most of these individuals have been in the cryptocurrency market."

Mullin recently emphasized the strategic partnership of the project with the Dubai-based real estate development company DAMAC in an interview with crypto.news. Mullin stated: "In addition to compliance, we are also driving real-world adoption through strategic partnerships, especially our collaboration with DAMAC Group, which has recently committed to tokenizing over $1 billion worth of real estate in Dubai."

According to data from DefiLlama, some investors pointed out that MANTRA's total locked value (TVL) is only about $13 million, while its fully diluted valuation could reach $9.5 billion, which may be a warning sign.

X user Insomniac, governance lead at Castle Labs, identified three recent transactions transferring millions of $OM tokens to OKX and Binance exchanges, showing possible signs of sell-offs. One wallet received about $36 million worth of $OM tokens from a Binance address on March 21, and then transferred about 4.3 million tokens to OKX in eight separate transactions on Saturday.

Previously, a Hong Kong court ordered six members of MANTRA DAO to disclose financial records related to the project, as they were accused of misappropriating DAO assets in a lawsuit.

Mullin and the MANTRA team did not immediately respond to requests for comment from (The Block).