The cryptocurrency launched by New York City’s former mayor Eric Adams is already in hot water, and now the company behind it is being forced to defend itself from accusations that it scammed people.
Investors and cryptocurrency watchers say the asset, dubbed NYC Token, surged to about $580m shortly after it hit the market on Monday and then rapidly plummeted in value. Observers speculated that someone behind the scene may have carried out what’s known in the crypto world as a “rug pull” – when the creators of the asset quickly sell their investments.
The company behind the coin has denied any wrongdoing.
In a statement posted on X, NYC Token said it was aware of the allegations but rejected claims of a rug pull. “Given the overwhelming support and demand for the token at launch, our partners had to rebalance the liquidity,” the company said.
Adams has not commented publicly about the accusations and could not be reached for comment. His exact role at the company is unclear.
The former mayor is a longtime cryptocurrency fan and debuted NYC Token, which has no affiliation with New York City or a government agency, at an appearance in Times Square on Monday. He said the asset was “built to fight the rapid spread of antisemitism and anti-Americanism” and urged people to buy it.
The website for NYC Token calls it a “community” currency and the “digital heartbeat” of the city. It says that total supply of the token is 1bn, but does not list any of the people behind the project and how such a cryptocurrency would fight antisemitism. In an ad Adams posted to X, he hyped the coin, exclaiming: “This thing is about to take off like crazy.”
Cryptocurrency is known for being highly speculative, with drastic swings from high to low. Even NYC Token’s website includes a disclaimer saying: “The value of NYCTOKEN may fluctuate significantly and could result in total loss of your investment.”
Such fluctuations were on full display on Monday when the value of the asset rose to nearly $600m and then tumbled to less than $100m in a matter of hours, according to the analytics platform Bubblemaps. In its analysis, Bubblemaps said NYC Token’s liquidity was “seeded and withdrawn” in unusual patterns right after launch.
“Several wallets purchased large amounts of $NYC early, then moved funds into and out of pools rapidly,” Bubblemaps said. “Timing and size of these movements suggest some level of pre-planned activity.”
NYC Token told Bloomberg the liquidity movements were adjustments to keep trading “running smoothly”. It added: “The team has not sold any tokens and is subject to lockups and transfer restrictions … The team has not withdrawn any money from the account.”
