OKX Exposes OM Scam, Covers Huge Losses with Security Fund

3 mins mins

Key Insights:

OKX covered all OM-related losses after exposing account collusion and price manipulation.
Exchange flagged abnormal OM activity and acted quickly before prices crashed sharply.
Evidence submitted to regulators; lawsuits are ongoing as OKX defends against public blame.

*OKX Exposes OM Scam, Covers Huge Losses with Security Fund*

OKX has issued a public announcement addressing concerns around recent abnormal trading activity related to MANTRA (OM). According to the exchange, it detected several connected accounts using large amounts of OM as collateral to borrow USDT. This move reportedly pushed the price of OM higher in an artificial manner.

The accounts involved were flagged by OKX’s risk team. OKX stated that the team reached out to the users behind the accounts to request corrective action. “They refused to cooperate,” OKX said in the statement. These actions raised questions about how such large volumes of OM were gathered and controlled by a limited group of individuals.

Price Crash and Losses Covered by Security Fund

Following the refusal of the accounts to comply, OKX took steps to take control of the related accounts. Shortly afterward, the price of OM dropped sharply. OKX confirmed that it only liquidated a small portion of the OM holdings, but the drop in price still led to large losses.

Those losses were absorbed by the OKX Security Fund, which is designed to cover user losses in abnormal events. “The OKX Security Fund operated exactly as designed,” the company stated. The exchange did not pass these losses on to users.

OKX also noted that independent third-party analysis found the majority of the downward pressure came from perpetual trading activity on platforms outside of OKX.

Regulatory Action and Legal Proceedings Underway

OKX stated that full documentation and evidence have already been submitted to regulators and law enforcement agencies. The exchange also confirmed that several lawsuits are currently in progress, although details were not disclosed.

Despite this, there has been no official explanation regarding the source of the large OM supply used in the activity. OKX’s team is continuing to support investigations into how the token supply was concentrated among the accounts in question.

Response to Public Statements by MANTRA Team

OKX responded directly to public comments made by the MANTRA team, which it described as inaccurate. According to OKX, the team has not addressed the core concerns raised, including the abnormal activity involving large OM collateral and the concentration of token supply.

“Instead of addressing these serious and suspicious activities, the MANTRA team continues to ignore the facts and publicly blame OKX,” the company said in its official communication.

OKX concluded by stating it will continue cooperating fully with authorities and remains focused on protecting its users.

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