Privacy Tech Could Be the Only Thing Standing Between Crypto and Another Mantra-Scale Meltdown

Forget ’trustless’—crypto’s next crisis demands unbreakable secrecy.

When the next algorithmic stablecoin implodes (and it will), private chains might be the only ones left standing. Here’s why:

• Opaque ledgers don’t panic-sell

• Zero-knowledge proofs > FDIC insurance

• Dark pools actually work when light-speed traders can’t front-run your collapse

Wall Street’s compliance officers will hate this. Good.

Why crashes like these happen

While there is no confirmed evidence that the Mantra founding team directly initiated the sell-off, the lack of transparency and concentration of token holdings contributed to speculation and market instability. It’s worth noting that large-scale liquidations may originate from affiliated entities such as market makers, who often receive allocations from Core teams or venture investors.

There are several reasons behind these types of market events. In some cases, bad actors exploit the system through rug pulls or deliberate market manipulation. However, more commonly, founders and core contributors are simply realizing profits. While this can be unsettling for investors, this volatility is a characteristic of the wider cryptocurrency market.

The issue arises when these exits are not managed transparently or responsibly, often triggering panic among holders, especially those who may lack experience and are more vulnerable to market volatility.

The difference often lies in how these events are structured. Take Mantra, for instance. When a single individual or entity controls a large portion of the token supply without proper legal or technical safeguards like vesting schedules, it introduces significant sell pressure risk to the market. This concentration of control becomes a red flag for investors.

Contrast that with Binance’s approach to Binance Coin (BNB). While the founding team also held a significant allocation, the process was handled with structured vesting and supply controls, allowing for a healthier ecosystem and long-term growth.

That said, there’s a delicate balance. Overly restrictive vesting or regulatory frameworks can deter early contributors and investors from launching new ventures. If the path to realizing returns is blocked entirely, the broader industry risks stagnation.

Traditional finance—A stark difference

In traditional equity markets, such as those governed by the Nasdaq, NYSE, or London Stock Exchange, insider activity is subject to strict oversight. Major shareholders and company insiders are legally required to disclose any significant sales or changes in ownership, regardless of the transaction size. These disclosures are part of a broader compliance framework designed to protect investors.

Public companies often spend tens of millions annually on regulatory filings, audits, and transparency measures—costs incurred specifically to ensure accountability and mitigate the risk of insider manipulation. Without such safeguards, market participants WOULD be exposed to unchecked selloffs and price manipulation by those with privileged information.

In contrast, the lack of standardized regulatory enforcement in many crypto markets allows insiders to operate with far fewer restrictions, increasing risk for everyday token holders.

While the crypto space has democratized token issuance and fostered rapid innovation, it has also enabled scenarios where individuals and teams can issue tokens with minimal governance or compliance obligations.

While this drastically lowers the barrier to entry and fuels rapid innovation, it also introduces risk for token holders. Without enforced disclosure requirements, vesting mechanisms, or accountability standards, insiders can offload large portions of their holdings without warning, often leaving retail participants exposed to abrupt market shocks.

Privacy swap—How to find that balance

One emerging concept in Panther’s architecture is the idea of Privacy-Preserving Swaps in entity-managed trading zones. These are envisioned as environments where regulated entities (such as VIRTUAL assets service providers) could facilitate DeFi transactions while leveraging zero-knowledge proofs to verify transactional data, without exposing sensitive transaction data. For instance, ownership concentration risks could be mitigated through auditable privacy frameworks that confirm vesting compliance or sell limits without revealing wallet identities.

When stakeholders fear large, undisclosed liquidations, a privacy-compliant system could support structured transparency, alerting the market while preserving privacy, and reducing the risk of panic-induced volatility.

Anish Mohammed is a co-founder of Panther Protocol. With a robust background spanning over 20 years in security and cryptography, Anish has made significant contributions to the design and audit of various blockchain protocols. He also co-founded the United Kingdom Digital Currency Association and played a crucial role as a reviewer for the ethereum network’s foundational documents. In addition to his technical roles, Anish holds positions on several advisory boards, including those for Ripple Labs and Hyperloop Transportation Technologies, showcasing his broad influence across multiple technology sectors.