Former New York City Mayor Eric Adams faces backlash from the crypto community over a questionable “rug pull” related to a newly introduced meme coin.
Recent events have placed Eric Adams under scrutiny after he endorsed a memecoin, which shortly after its launch, saw unusual liquidity withdrawals. This has triggered concerns among traders, many labeling it a potential “rug pull” scheme. Essentially, in this scam, a new cryptocurrency is heavily promoted only for insiders to quickly pull out their funds, leaving buyers with largely worthless coins.
Adams introduced the NYC Token at a Times Square press event, claiming it would foster civic action through cryptocurrency. The announcement generated swift interest from retail investors, with the market cap reaching approximately $580 million soon after trading commenced, highlighting significant enthusiasm from the crypto crowd.
However, the excitement was fleeting. Just hours post-launch, blockchain analysis revealed alarming liquidity movements that raised questions about the token’s operational integrity. Analysts from the blockchain research firm Bubble Maps and others indicated that wallets linked to insiders withdrew around $2.5 million shortly after the token’s peak market performance.
These early withdrawals triggered alarm bells within the trading community. After the initial liquidity was drawn, around $1.5 million was later added back to the liquidity pool, but by then, the token’s value had plummeted over 60%. Interestingly, about $900,000 in USDC remained unreturned to the pool, as tracked by an on-chain monitoring system.
The sudden movements of liquidity fueled widespread condemnation of rug pulls, a common term in crypto for when creators or insiders drain liquidity, hindering traders from selling their assets without incurring hefty losses due to plummeting prices.
According to the token’s official site, the NYC token has a total supply of 1 billion coins, with 70 percent allocated to reserves not available to traders. This raised further concerns about centralization and control among analysts in the crypto space.
In his announcement, Adams stated the proceeds from the tokens would support initiatives against anti-Semitism and anti-Americanism via an undisclosed nonprofit. Yet, he did not clarify who the project co-founders were or provide details on how the raised funds would be handled.
During an interview with Fox Business host Maria Bartiromo, Adams’s responses regarding the coin’s purposes seemed muddled and lacking clarity. He awkwardly tried to liken blockchain technology to enterprise applications.
The interview also revealed several verbal slips from Adams. He mistakenly referred to blockchain as “block-change” technology multiple times and seemed to confuse the NYC token with a different crypto project sharing a similar name.
