Mantras native token sheds 90% of its market cap after exchanges forcibly close positions without notice

The team behind real-world tokenized asset blockchain Mantra says its native token's sudden 90% plunge was caused by exchanges forcibly closing positions without notice

The price of Mantra (OM) has dropped by 90% following reports that centralized exchanges closed account positions without notice, leading to the token's market cap getting wiped out.

According to a statement by Mantra co-founder John Mullin on Thursday, a very sudden closure of account positions was initiated without sufficient warning or notice.

"That this happened during low-liquidity hours on a Sunday evening UTC, early morning Asia time, points to a degree of negligence at best, or possibly intentional market positioning taken by centralized exchanges," he said.

The timing and depth of the crash suggest that very quickly, over the course of a few hours on Sunday evening, April 14, A very large portion of the OM token holders on centralized exchanges had their account positions closed out forcefully by the exchanges. This action was taken without sufficient warning or notice to the account holders.

"We are still figuring out the details, but it seems like one exchange in particular might be to blame for the forced closures of OM accounts, leading to the price crash," said Mullin.

However, Mullin clarified that the centralized exchange in question wasn’t Binance.

The token is now trading at $0.7894, having hit an all-time high of just under $9 on February 23. It is currently down over 91% from that figure, according to CoinGecko.

Some traders have alleged the token collapse was a rug pull, while others are speculating the Mantra team had used their tokens as collateral to take out a massive loan from a centralized exchange and the team fell prey to a loan risk parameter change, then a margin call.

However, Mullin denied these theories in follow-up X posts, saying, "The team did not have a loan outstanding" and haven't orchestrated a rug pull.

"Tokens remain locked and subject to the published vesting periods. OM's tokenomics remain intact, as shared last week in our latest token report. Our token wallet addresses are online and visible," Mullin said.

The statement comes after the token dropped from $6.30 to below $0.50. At the time of writing, the token has recovered slightly and is changing hands at $0.7894.

At the beginning of the year, Mantra announced plans to tokenize $1 billion in assets held by investment conglomerate DAMAC.

The company also announced in February that it had received a virtual asset service provider license from Dubai's Virtual Assets Regulatory Authority.