Price manipulation rising amid Mantra, Story Protocol crashes

Arthur Cheong, the founder of DeFiance Capital, has warned of growing cryptocurrency price manipulation, describing the trend as a serious danger to investor trust amid Mantra and Story Protocol token crashes.

In an Apr. 14 post on X, Cheong warned that projects and market makers are increasingly working together behind the scenes to artificially sustain token prices, creating a market where “you don’t know whether the price is a result of organic demand and supply” or coordinated manipulation.

He went on to say that centralized exchanges are ignoring the issue, creating what he referred to as a “lemon’s market,” in which insiders profit while investors bear the risk. Cheong also noted that majority of recent token generation events have performed poorly, with prices falling 70-90% after listing.

Due to widespread price manipulation, Cheong came to the conclusion that a large portion of the cryptocurrency market will remain “uninvestable” unless the industry fixes these structural flaws.

Cheong’s post comes after the Mantra (OM) token lost 90% of its value in under 24 hours, wiping out over $5 billion in market cap. Independent crypto analysts pointed out that Mantra had moved millions of OM tokens to OKX just ahead of the price crash, though Mantra has denied these claims.

With 90% of the token supply controlled by the team, many believe this was a case of insider selling disguised as a market event. Mantra’s CEO denied any wrongdoing, blaming the crash on CEX liquidations.

The concerns didn’t stop with Mantra. As the Mantra drama unfolded, Story Protocol’s (IP) token dropped 25% within an hour, falling from $4.24 to $3.02 before partially recovering. Once more, Binance and OKX, the same exchanges connected to the OM crash, accounted for the majority of the trading volume.

Binance suggested the crash was caused by forced liquidations, while OKX pointed to tokenomics changes and suspicious exchange deposits. The conflicting statements added to speculation over manipulation.

Meanwhile, manipulation has spread to decentralized markets. Last month, a trader on Hyperliquid opened a $5 million short on the JELLY token, then self-liquidated the position by pumping the token’s price on-chain, leading Hyperliquid’s vault to absorb the loss. 

In an analysis shared with crypto.news, Oak Security’s Dr. Jan Philipp Fritsche described it as “a textbook case of unpriced vega risk,” showing how vulnerabilities in DeFi design can still be exploited even without technical bugs.