Reckless Forced Closures by CEXs Caused OM Token’s 90% Price Drop, Says John Patrick Mullin

John Patrick Mullin, the co-founder and CEO of MANTRA, addressed the OM token’s abrupt 90% price decline

John Patrick Mullin, the co-founder and CEO of MANTRA, has addressed the OM token’s abrupt 90% price decline on Sunday, attributing the drop to “reckless forced closures” on CEXs, rather than any alleged internal activity by the project team.

“The timing and depth of the crash suggest that a very sudden closure of account positions was initiated on one or more centralized exchanges (CEXs) with insufficient warning or notice,” Mullin said in a statement to the community a few hours after the crash surfaced.

While not naming any specific platform, the entrepreneur argued that the issue was the possibly unchecked and “reckless” actions of the CEXs where OM was being traded.

“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 stated.

The entrepreneur went on to note that these exchanges “continue to exercise enormously high levels of discretion, especially in times of market stress,” adding that when such powers are used without oversight, “dislocations like what recently happened can and will occur, hurting both projects and investors alike.”

The OM token, which peaked at $9 earlier this year, fell from $6.3 to as low as $0.37 on April 13. At the time of writing, the token has slightly recovered above $1.

Following the crash, MANTRA was accused of offloading their bag, a claim that Mullin refuted, stressing that “this dislocation was not caused by the team, the MANTRA Chain Association, its core advisors, or MANTRA’s investors.”

“We are still in the early stages of ascertaining the precise actions that led to this event, but it appears to be a very substantial liquidation of a large OM token holder on one or more CEXs, in low-liquidity hours on Sunday evening UTC,” he stated.

Mullin added that all team and investor tokens are still locked according to their publicly disclosed vesting schedules and that the OM token’s fundamental tokenomics remain unchanged.