- Mantra and Story token crashes raise red flags about insider activity and price manipulation on major centralized exchanges.
- Centralized exchanges are under fire for allegedly ignoring manipulative practices that leave retail investors vulnerable to sharp token declines.
- Manipulation methods are spreading to DeFi platforms, exposing systemic design issues despite the absence of technical security flaws.
Arthur Cheong, founder of DeFiance Capital, has raised serious concerns over growing instances of price manipulation in the cryptocurrency market. His remarks followed steep price crashes of several tokens, including Mantra’s OM and Story Protocol’s Story token.
Mantra’s OM token plunged by 90 percent within 24 hours, erasing over $5 billion in market capitalization. Independent analysts flagged the movement of $26.96 million worth of OM tokens to OKX shortly before the drop, raising concerns of insider selling. Despite this, Mantra’s CEO denied the claims, attributing the crash to centralized exchange (CEX) liquidations.
Story Protocol’s Story token also experienced a sharp decline, falling 25 percent in one hour. The majority of the trading volume came from Binance and OKX, the same platforms associated with the OM crash. Conflicting explanations from the exchanges added to speculation. Binance linked the drop to forced liquidations, while OKX pointed to changes in tokenomics and unusual deposits.
Centralized Exchanges Under Scrutiny
Cheong criticized centralized exchanges for failing to address manipulative behavior. He described the environment as a “lemon’s market,” where insiders benefit at the expense of regular investors. He emphasized that many token launches are now performing poorly, with prices dropping between 70 to 90 percent after listing.
According to Cheong, the lack of transparency is making it increasingly difficult to distinguish between legitimate market activity and artificial price support. This, he warned, is damaging investor confidence and making the crypto market riskier.
Manipulation Tactics Appear in DeFi Markets
Concerns are not limited to centralized platforms. A recent case on the decentralized exchange Hyperliquid demonstrated that manipulation tactics are also targeting DeFi protocols. A trader opened a $5 million short on the JELLY token, then pumped its price to trigger liquidation. Hyperliquid’s vault absorbed the loss. Security researchers confirmed this as an example of exploiting DeFi design flaws, even without any code-level vulnerabilities.
Cheong proved that investor attraction to cryptocurrency markets depends heavily on implementing necessary structural changes. The industry should organize itself around open business methods, which will re-establish public confidence, according to Cheong.
