The cryptocurrency market has been rocked by allegations of manipulation and fraudulent practices surrounding the OM token, according to a recent episode of “The Chopping Block” podcast. It was revealed that the team behind Mantra, the project associated with OM, collaborated with market makers to artificially inflate trading volume and circulating supply figures, creating a false impression of market activity.
By engaging in token cycling among controlled addresses and exchanges, the Mantra team and market makers were able to deceive data aggregators like CoinGecko and CoinMarketCap, leading to OM being falsely ranked as a top-25 asset by market capitalization. However, the fabricated liquidity scheme eventually unraveled when a large OM holder attempted to sell off their tokens, resulting in a drastic 90% price decline within just 90 minutes.
In response to this incident, industry experts have proposed several solutions to address the vulnerabilities that allowed the manipulation to occur. One suggestion is to require full disclosure of market-making agreements as a prerequisite for listing tokens on major exchanges like Binance and Coinbase. This transparency would help differentiate genuine trading volume from artificially inflated metrics.
Furthermore, there have been discussions about implementing stricter verification processes for token distribution claims, including on-chain audits and assessments of wallet ownership concentration. While these solutions may face challenges such as resistance from market makers and increased operational costs for exchanges, the consensus is that coordinated action by major platforms could effectively combat fraudulent practices in the market.
The collapse of OM and the subsequent scrutiny on data reporting standards serve as a stark reminder of the importance of transparency and integrity in the cryptocurrency industry. By implementing measures to enhance disclosure and verification processes, the industry can work towards building a more trustworthy and stable market environment for investors and participants alike.