Binance Flags Dangerous Mantra's OM Volatility With Leverage Cut Months Before Crash

OM Token Plunge Triggers Binance Alert With Cross-Exchange Liquidation Fallout

Crypto exchange Binance responded to the sharp price drop in OM, the native token of Mantra, in a series of posts on social media platform X via its Binance Customer Support account. The platform pointed to external activity as the cause:

Binance is aware that OM, the native token of Mantra, has experienced significant price volatilities. Our initial findings indicate that the developments over the past day are a result of cross-exchange liquidations.

Binance emphasized that since October it had reduced leverage on OM and warned users about the token’s expanding supply since January. The exchange noted: “Since January this year, Binance has also issued a pop-up warning for OM on its spot trading page to inform users that the token has undergone significant changes to its tokenomics increasing its supply.” Reaffirming its stance, the exchange stressed: “We remain dedicated to monitoring the situation closely and will continue to take appropriate actions to protect our users and maintain the integrity of our platform.”

John Patrick Mullin, co-founder of Mantra, offered a pointed critique of centralized exchanges, claiming they were responsible for the market turmoil. In a statement posted to social media platform X, Mullin wrote:

We have determined that the OM market movements were triggered by reckless forced closures initiated by centralized exchanges on OM account holders. The timing and depth of the crash suggest that a very sudden closure of account positions was initiated without sufficient warning or notice.

He also pushed back against any suggestions that the project’s team was behind the price moves: “To be clear, this dislocation was not caused by the team, the Mantra Chain Association, its core advisors, or Mantra’s investors selling tokens. 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.”

Although critical of how events unfolded, Mullin also acknowledged Binance’s responsiveness during the crisis. He stated: “We’ve been in touch with the Binance team, and they have been highly communicative, helpful, and supportive. We want to thank Binance and their team for the way they’ve handled this tough situation.” Binance separately responded to traders reporting issues with taking profits, advising them to submit order IDs and screenshots for review.