Crypto Coin Peddled by Eric Adams Denies Allegations of 'Rug-Pull' Scam

Former New York City Mayor Eric Adams launched a cryptocurrency known as the NYC Token on January 12. He described the token as a digital initiative to combat antisemitism and promote blockchain education according to reports. The token quickly gained attention, fueled by Adams' public endorsements and media appearances as reported.

Within minutes of its launch, the NYC Token's market capitalization soared to approximately $580-600 million. However, the momentum did not last, and the token lost around 81% of its value within roughly 30 minutes. This sudden drop raised red flags among crypto investors and analysts.

On-chain data revealed unusual liquidity movements associated with the token. A wallet linked to the token's deployer removed approximately $2.43 million in USDC liquidity near peak pricing. Some of the liquidity was later added back, but a significant amount remained unaccounted for according to analysis.

Why Did This Happen?

The NYC Token was built on the Solana blockchain and marketed as a "community" cryptocurrency. Its official website described the token as a way to fund social causes, including advocacy for underserved communities and blockchain literacy programs according to reports. However, the project did not provide a whitepaper or detailed technical roadmap at launch as noted.

Adams presented the token as part of a broader initiative to position New York City as a global crypto hub. The project aimed to channel proceeds to nonprofits, including advocacy groups and HBCUs according to reports. Despite these social goals, critics highlighted the lack of transparency and governance details as analysts have pointed out.

How Did Markets Respond?

The initial surge in value was driven by social media promotion and Adams' public persona. The token's value reached a high of $0.58 before plummeting to under $0.11.

Retail investors were affected, with some losing significant amounts in under 20 minutes. One on-chain transaction showed a trader losing $473,548 in a short span.

The sudden drop sparked accusations of a "rug pull," a term used to describe a scenario where project insiders drain liquidity and leave retail buyers with steep losses as reported.

What Are Analysts Watching Next?

Blockchain analytics firm Bubblemaps reported unusual liquidity behavior surrounding the NYC Token. A wallet associated with the token's deployer removed approximately $2.5 million in USDC liquidity near the peak. This activity raised concerns about transparency and accountability.

Crypto analysts like Rune Crypto and StarPlatinum flagged the project for its centralized structure and liquidity risks. Some questioned whether the project's promotional claims matched its on-chain execution.

Adams has not yet responded to these allegations. The project team attributed the liquidity movements to a "rebalancing process" but has not provided a detailed accounting of the funds.

Regulatory scrutiny is likely to intensify, especially in light of recent legislative proposals to criminalize certain "rug pull" conduct in New York.

The NYC Token now faces a critical test of its legitimacy and transparency as it continues to attract attention from both retail investors and crypto analysts.