DeFiGovernance

The cryptocurrency market has been jolted by a significant scandal involving Mantra ($OM) and its co-founder, John Patrick Mullin. On April 13, 2025, a viral exposé published on X (formerly Twitter) accused Mullin of orchestrating a $5 billion rug pull—one of the largest in crypto history. Within just one hour, the price of the OM token plunged by 90%, drawing immediate comparisons to the infamous collapse of Terra’s $LUNA in 2022. The fallout has raised serious concerns regarding project governance, insider manipulation, and the broader vulnerabilities within the decentralized finance (DeFi) space.

The Collapse of $OM: Over $5.5 Billion Wiped Out

On April 13, $OM’s price plummeted from $6 to $0.60, erasing approximately $5.5 billion in market value in a matter of minutes. The sharp decline followed allegations of internal misconduct, including tokenomics manipulation, deceptive airdrop practices, insider trading, and compromised governance mechanisms.

This event has profoundly damaged investor confidence, drawing widespread criticism from analysts, developers, and retail investors alike.

John Patrick Mullin: The Alleged Mastermind

John Patrick Mullin, co-founder of Mantra and a known figure in the blockchain community, is at the center of the controversy. Mullin previously championed a vision of building a chain with $100 billion in total value locked (TVL) and oversaw OM’s rise into the top 50 cryptocurrencies by market cap.

However, the exposé alleges this success was largely fabricated. Once the token hit peak valuation, insiders—including Mullin—allegedly began offloading significant holdings, triggering the price collapse. Mullin’s public response, in which he took partial responsibility while reiterating his lofty goals, was widely criticized as tone-deaf and lacking accountability.

Breakdown of the Alleged Scheme

The report outlines a multi-layered scheme designed to extract maximum value while misleading investors:

Airdrop Bait-and-Switch

Mantra launched a 50 million OM token airdrop to drive user adoption. Initially, 20% of the airdropped tokens were unlocked immediately. However, the vesting schedule was subsequently altered multiple times—first limiting daily unlocks to 0.3%, then shifting to a 10% unlock in March 2025, with the remainder locked until 2027—effectively restricting liquidity for retail participants while allowing insiders full access.

Non-Transparent Tokenomics Changes

The OM tokenomics were reportedly altered three times without open community input, centralizing control and eroding trust.

Bridge Exploitation

Investors were required to bridge their OM tokens to the MANTRA Chain, which was allegedly used by insiders to artificially inflate prices. After attracting late-stage buyers, insiders are accused of dumping their holdings, contributing to the crash.

Governance Manipulation

Despite promoting itself as a decentralized autonomous organization (DAO), Mantra reportedly operated under centralized control. Governance votes required staked OM, but were allegedly manipulated using fake wallets to ensure insider dominance.

Insider Trading and OTC Dumping

Blockchain data reveals a wallet linked to the core team transferred 3.9 million OM to OKX shortly before the crash. Additionally, insiders were reportedly offered discounted OTC (over-the-counter) deals, allowing them to liquidate holdings prior to the public sell-off.

Public Response and Market Repercussions

Mullin’s statement—“My decision, my responsibility”—has been widely criticized as inadequate. Many have called for regulatory scrutiny and industry-wide introspection. The incident has also raised alarm over Mantra’s connections with prominent exchanges such as HTX and Poloniex, sparking concerns about potential delistings and broader contagion risks.

This event further exposes a systemic issue within DeFi: centralized control disguised as decentralization, undermining the core principles of the ecosystem.

Investor Takeaways and Recommendations

In response to the scandal, experts advise investors to exercise heightened due diligence when evaluating crypto projects. Key recommendations include:

Reporting the incident to exchanges and requesting reviews or delisting of $OM.
Raising awareness via social media to prevent further investor harm.
Scrutinizing tokenomics and governance models before investing.
Avoiding projects that rely heavily on hype or vague decentralization claims.

While some speculate that memecoins may offer safer short-term speculation, they also carry inherent volatility and risk.

A Wake-Up Call for the Industry

The Mantra debacle is a stark reminder of the challenges facing the DeFi sector. While decentralization holds transformative potential, the lack of transparency and accountability in some projects continues to pose significant threats to market integrity.

This incident should serve as a catalyst for reform, emphasizing the need for improved investor protections, genuine decentralization, and greater transparency from project teams. As the crypto industry evolves, these cautionary episodes can contribute to a more robust, trustworthy ecosystem—provided their lessons are taken seriously.

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