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The Mantra team has linked the recent drop in its OM
OM

$0.5334

token to unexpected position closures by centralized exchanges (CEXs).

On April 13, the token’s value fell from around $6.30 to under $0.50, wiping out more than 90% of its market cap, which had reached about $6 billion.

Mantra’s co-founder, John Mullin, said in an April 14 post on X that the drop was not due to typical market movement but instead came from exchanges closing user positions without warning.

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He described the actions as “reckless” and said they likely happened during a low-trading period—Sunday evening in UTC, which is early Monday in Asia. Mullin suggested this timing raised questions about how the exchanges handled the event.

Mullin said they suspect one exchange, in particular, may be responsible. He confirmed that it was not Binance

$5.79B

but did not name the platform.

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Some traders said that Mantra might have used OM tokens to secure a large loan, which was liquidated when risk rules changed. Others have speculated that the price drop was a coordinated exit or “rug pull”.

Mullin rejected these claims, saying no loan was taken and the team had not removed any funds. He also noted that all team-held tokens were still locked according to the project’s release plan and that wallet activity remains open for review.

Meanwhile, an Ethereum
ETH

$1,625.51

holder lost a large amount of funds after a price drop triggered an automatic liquidation on the lending platform Sky. What did Lookonchain, a blockchain analytics platform, say about it? Read the full story.

SEC’s Hester Peirce Advocates For Policy Reform

“During the past several years, enforcement cases have been used as a way to make regulatory policy; that is very atypical,” Peirce stated. “We’re trying to get back to a path where we’re really using our other tools to make policy.”

The SEC’s recent request to pause litigation against Binance, the world’s largest cryptocurrency exchange, further illustrates this shift. The commission had previously sued Binance and its co-founder, Changpeng “CZ” Zhao, in 2023, alleging that the platform mishandled customer funds and violated securities laws.

The SEC is now seeking a 60-day stay in the lawsuit, citing the ongoing development of a regulatory framework for digital assets. Peirce refrained from commenting on the potential outcomes of the lawsuit, emphasizing the need for a case-by-case evaluation.

Peirce is now leading a crypto-focused task force within the SEC aimed at developing a “comprehensive and clear” regulatory framework. Among her objectives are determining which digital assets qualify as securities and identifying areas that fall outside the SEC’s jurisdiction.

Peirce’s previous efforts have garnered praise from the digital-asset community, particularly for her support of Bitcoin exchange-traded funds (ETFs) and her dissenting opinions on various SEC enforcement actions, earning her the nickname “Crypto Mom.”

Congressional Inaction Leaves Crypto Classification In Limbo

Historically, the SEC’s aggressive stance on crypto regulation has been exacerbated by Congress’s inability to pass legislation that clearly defines cryptocurrencies as either securities or commodities.

This lack of clarity has led to confusion and legal challenges, including a significant court ruling that rejected the SEC’s classification of XRP as an alleged security instead of a commodity as in Bitcoin’s case.

Help may be on the horizon, as bipartisan legislation like the FIT21 bill aims to delineate the respective jurisdictions of the SEC and the Commodity Futures Trading Commission (CFTC) over digital assets. Additionally, another proposed bill seeks to establish a special status for stablecoins.

Peirce had previously acknowledged the “legal imprecision and commercial impracticality” that has characterized the SEC’s approach since it first applied the Howey test to cryptocurrencies in 2017.

This environment has resulted in slow litigation processes and hindered rulemaking, leaving many crypto projects in limbo. Looking ahead, Peirce stressed the importance of focusing on fraud and misconduct while also anticipating a rise in applications for regulatory relief and no-action letters.

She underscored the necessity of diligent practices during this transitional period to ensure that regulatory clarity is achieved for the evolving digital assets market.

The 1D chart shows the total crypto market cap valuation at $3.08 trillion. Source: TOTAL on TradingView.com

Featured image from DALL-E, chart from TradingView.com