The rapid plummet of a digital coin promoted by ex-New York City Mayor Eric Adams is drawing outrage from investors and crypto mavens who say the debut of the currency resembles a “rug pull” or “pump-and-dump” scheme.
“NYC Token” fell a jaw-dropping 82% in value less than an hour after opening Monday afternoon — and as someone withdrew $2.5 million in liquidity from the asset.
The cryptocurrency reached a market capitalization of around $600 million shortly after its debut on the Solana blockchain, following Adams’ promotion of the coin at a Monday morning press conference in Times Square.
“This thing is about to take off like crazy,” Adams said in a video promo for the currency.
The token — proceeds from which would go to unspecified efforts to fight antisemitism and so-called “anti-Americanism,” the ex-mayor bizarrely said — opened at $0.60 per share.
But its value quickly plummeted to $0.11 as a party took out $2.5 million from the token. The token was valued around $0.13 as of Wednesday afternoon.
Observers noted that the sudden collapse bore the hallmarks of what is known as a “rug pull” scheme — similar to a “pump-and-dump” — in which unscrupulous entrepreneurs drain the value out of a cryptocurrency shortly after they launch it.
The identity of the party that withdrew the $2.5 million is not yet known. About $1.5 million of those funds were later put back in the NYC Token.
The developers of the coin likely made a cool $1 million off the maneuver, Nicolas Vaiman, the founder of crypto analytics firm Bubblemaps, told Fortune.
A NYC Token spokesperson told The Post: “After the launch of NYC Token, there was a lot of demand.
“Our market maker made adjustments in an attempt to keep trading running smoothly, and as part of this process, moved liquidity. The team has not sold any tokens and is subject to lockups and transfer restrictions.”
The spokesperson added that nobody from the team behind the digital currency withdrew any money from the account.
An Adams spokesman strongly denied that the former mayor profited from the maneuvering.
“Recent reports alleging that Eric Adams moved money out of the NYC Token are false and unsupported by any evidence,” spokesman Todd Shapiro told The Post on Wednesday. “To be absolutely clear: Eric Adams did not move investor funds.
“Eric Adams did not personally invest in the NYC Token,” he added. “Eric Adams did not profit from the launch of the NYC Token. No funds were removed from the NYC Token by Eric Adams.”
Unlike a traditional stock offering, meme coins do not launch through regulated IPOs with disclosures or lockup periods. Instead, they typically begin trading through a liquidity pool on a blockchain exchange.
Under that kind of setup, creators pair newly minted tokens — which cost virtually nothing to generate — with a relatively small amount of real money, often in a dollar-pegged stablecoin such as USDC. The initial price is set by the ratio of tokens to USDC in the pool, and buyers swap USDC directly for meme coins as trading begins.
That structure would explain why NYC Token’s brief $600 million market capitalization did not mean $600 million in cash flowed into the project. Market cap is calculated by multiplying price by total token supply, regardless of how much real money is backing trades.
Blockchain data reviewed by analysts showed the liquidity pool behind NYC Token held only about $3 million to $4 million in USDC — the actual funds supporting buying and selling — at the peak. The rest of the valuation was largely theoretical.
The setup would also explain how a single account was able to withdraw roughly $2.5 million shortly after launch. The funds were removed directly from the liquidity pool, not by selling tokens on the open market — an action only possible for whoever controlled or had privileged access to that pool.
Critics who said the NYC Token episode resembled a classic “rug pull” pointed to the fact that the top 10 accounts controlled about 99% of the token supply and no lockup rules preventing insiders from cashing out.
Vaiman said he was left at a loss, telling Fortune: “I truly have no explanation on why [the coin’s developers] did it.”
“Is this as simple as just pure grift?” he added. “Maybe I’m overoptimistic and I don’t want to believe that’s the case, but maybe this is what it is.”
Meanwhile, a possible trademark dispute is brewing that involves a Bronx-based entrepreneur who accused Adams of hijacking the NYC Token concept.
Edward Cullen claims he pitched the idea for a cryptocurrency branded around New York City to Adams’ team in June and had already trademarked the name “NYC Token” before the former mayor’s public rollout.
Cullen has said Adams and his associates moved forward with the project without his consent and used the branding despite his prior claim.
The entrepreneur has threatened legal action, arguing that the launch trampled his intellectual property rights and misled investors about the origins of the project.
“The blatant nature of what happened left us confused and shocked,” Cullen said in a statement to The Post. “We are going to pursue action, including sending a cease-and-desist within the next two days.”
“We are 100% going to hold [Adams] accountable, and we are going to go through every avenue of accountability available to us,” he added.
Adams and representatives for NYC Token have not publicly addressed the trademark allegations.
Some critics say the episode highlights the growing risks of politicians lending their names and credibility to speculative financial ventures, warning that official stature can blur the line between public service and private promotion — and leave everyday investors exposed when hype overtakes fundamentals.
“If a sitting president can attach their name to a speculative financial product, then every governor, mayor, and city councilmember now has the green light to do the same,” said Dean Lyulkin, CEO of Cardiff.
“Once political credibility becomes a marketing asset, the line between public service and private promotion effectively disappears. You cannot argue that this behavior is inappropriate at the local level if it has already been tolerated at the top.”
“In the end, this is a buyer-beware story as old as time,” Lyulkin said.
“A fool and his money are still soon parted — crypto just makes the lesson faster and more visible. Technology has not repealed human nature, it has simply made expensive mistakes easier to scale.”
For his part, Adams “remains committed to responsible innovation and to using emerging technologies to strengthen trust, education, and shared civic values,” his spokesman said.
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