Former NYC Mayor Eric Adams Accused of $2.5M Crypto 'Rug Pull' as NYC Token Crashes

Former New York City Mayor Eric Adams is facing allegations of a $2.5 million liquidity withdrawal from his newly launched NYC Token. The token, which initially surged to a market cap of nearly $600 million, has since crashed to around $110 million. A wallet linked to the token deployer removed $2.43 million in USDC liquidity, later adding back $1.5 million and leaving $932,000 unaccounted for.

The sudden liquidity movements have raised concerns among on-chain analysts and traders, who are comparing the situation to previous scams involving political figures. The wallet in question, identified as 9Ty4M, created one-sided liquidity pools on the Meteora platform, a move that on-chain analytics firm Bubblemaps described as "reminiscent of the $LIBRA launch."

Adams unveiled the token in a press conference in Times Square, stating it would be used to fund efforts against antisemitism and anti-Americanism and to educate children about blockchain technology. The token's website states it has a maximum supply of 1 billion tokens, with 70% allocated to a reserve.

Why Did This Happen?

The liquidity withdrawal occurred shortly after the token's price peaked at $0.58. On-chain data shows that the wallet associated with the token deployer removed $2.43 million in USDC near the peak. After the price dropped by over 60%, $1.5 million was added back, but $932,000 remains unreturned.

Bubblemaps confirmed the suspicious activity, reporting that the wallet created one-sided liquidity pools on Meteora. The firm noted that the liquidity moves were unexplained and similar to those seen in the $LIBRA launch.

How Did Markets React?

The NYC Token's price has fallen by more than 81% from its peak to just $0.11, according to Solscan data. The token has drawn comparisons to other politically backed cryptocurrencies, such as the $LIBRA token promoted by Argentine President Javier Milei. The $LIBRA scandal led to frozen assets, fraud investigations, and class-action lawsuits.

Nansen reported that only 14% of $LIBRA investors turned a profit, while 86% lost a combined $251 million. A U.S. class-action lawsuit later named Meteora co-founder Benjamin Chow as the mastermind behind at least 15 token launches, including the high-profile $MELANIA and $LIBRA tokens.

What Are Analysts Watching Next?

Analysts are monitoring the situation to determine whether Adams and his team will provide an explanation for the liquidity moves. The project's website remains live but offers limited operational details. On-chain data continues to show active wallet movements tied to the token's early trading.

Crypto analyst Star Platinum warned about the project's centralized structure and the risks it poses to retail holders. The project attributed the liquidity movements to a rebalancing process but did not provide further details.

Adams has not responded to allegations or provided clarifications since the liquidity concerns emerged. He previously advocated for blockchain technology during his tenure as mayor and even received his first three paychecks in Bitcoin. However, those checks were converted into Bitcoin and Ethereum through Coinbase on Fridays, as New York City is required to pay wages in government currency.