The steep decline of a digital currency endorsed by former New York City Mayor Eric Adams has ignited frustration among investors and crypto supporters. Many believe its launch resembles a classic “pull the rug” or “pump-and-dump” scheme.
Within less than an hour of starting trading on Monday afternoon, the NYC token plummeted by an alarming 82%, coinciding with a withdrawal of $2.5 million in liquidity from the asset.
Initially, the cryptocurrency boasted a market cap near $600 million after its debut on the Solana blockchain, largely due to Adams promoting it during a press conference in Times Square earlier that day.
“This is going to move with great force,” Adams claimed in a video promoting the token.
The token made its entry at a price of $0.60 per share. Yet, in a perplexing statement, the former mayor suggested that the profits would support vague initiatives to fight anti-Semitism and so-called “anti-Americanism.”
However, shortly after the launch, its value nosedived to $0.11 following the withdrawal of those funds.
Observers noted that the sudden downturn exhibited characteristics of a so-called “rug pull” scheme, akin to a “pump-and-dump,” where unethical entrepreneurs deplete the value of cryptocurrencies soon after their introduction.
The identity of the individual behind the $2.5 million withdrawal remains a mystery. About $1.5 million of those funds were subsequently changed back into NYC tokens.
Reports suggest that the coin’s developer could have profited around $1 million from this maneuver, according to Nicholas Weiman, a founder of a cryptocurrency analysis firm.
A representative for Digital Coin commented, “Following the launch of the NYC token, there was significant interest.”
“Our market makers made adjustments to facilitate smooth trading and moved liquidity as part of that process. The team hasn’t sold any tokens and is bound by lockups and transfer limitations.”
The representative further asserted that no one on the digital currency’s team has withdrawn funds from their accounts.
Weiman voiced skepticism about the situation, stating, “There’s no explanation at all for their actions. Is this just a case of outright dissatisfaction? Maybe I’m being too optimistic, but perhaps this is the reality.”
In a related development, a potential trademark conflict has arisen involving a Bronx entrepreneur who accuses Adams of co-opting the New York Token concept.
Edward Cullen had pitched the concept of a New York City-branded cryptocurrency to Adams’ team back in June and asserts that the former mayor trademarked the “NYC Token” name before making it public.
Cullen claims that Adams and his associates advanced the project without his permission and used the brand despite his prior claims.
The entrepreneur is contemplating legal action, stating that the launch infringed upon his intellectual property rights and misled investors regarding the project’s origins.
“We were confused and shocked by the blatant nature of what occurred,” Cullen remarked. “We plan to act within the next two days, including sending a cease-and-desist order.”
“We aim to retain 100% accountability,” he added.
So far, Adams and NYC Token representatives have not addressed the trademark claims publicly.
This incident has raised concerns among critics who suggest it underscores the dangers of political figures associating themselves with speculative financial products. They argue that it blurs the lines between public service and personal promotion, putting everyday investors at risk when hype overcomes fundamentals.
“If a sitting president can endorse a speculative financial product, that effectively grants every governor, mayor, and city council member permission to do the same,” observed Cardiff CEO Dean Rylkin.
“Once political credibility is treated as a marketing tool, the distinction between serving the public and promoting private interests fades away. You can’t really argue that such behavior is inappropriate locally if it’s tolerated at higher levels.”
“Ultimately, this is an age-old lesson for buyers,” Rylkin cautioned. “Fools and their money tend to part ways quickly. Cryptocurrency merely accelerates the visibility of these mistakes. Technology hasn’t erased human nature; rather, it amplifies our more costly errors.”
