Former New York Mayor Eric Adams launched a cryptocurrency token Monday that lost most of its value within hours, sparking widespread fraud accusations, The Washington Post reported.
Adams unveiled the NYC Token at a Times Square press conference Monday, describing the meme coin as a vehicle to fight "anti-Americanism" and antisemitism while serving "to teach our children how to embrace the blockchain technology," according to The Washington Post. The announcement provided minimal details about funding sources or how proceeds would achieve these goals.
The token's market capitalization rocketed to roughly $580 million shortly after its Monday night launch, The Washington Post reported. However, Bubblemaps – a blockchain analytics platform – soon flagged "suspicious liquidity movements," noting a connected digital wallet withdrew approximately $2.5 million at peak value, then returned about $1.5 million after a 60% value drop, the report stated.
Digital currency analysts have labeled the incident a "rug pull" scam – a scheme where cryptocurrency creators suddenly liquidate holdings, leaving the token worthless, The Washington Post reported. "This is such an obvious rug," Bubblemaps CEO Nicolas Vaiman told Fortune on Tuesday.
A statement from NYC Token's official X account claimed its partners "had to rebalance the liquidity" given "overwhelming support and demand for the token at launch," The Washington Post reported. "We're in it for the long haul!" the post stated.
Vaiman told The Washington Post that legitimate liquidity rebalancing would happen gradually with smaller amounts. "Instead, they pulled $2.5M at once, added back only $1.5M, and stayed silent until the backlash. This looks far more like damage control than a genuine mistake, which is why I called it a rug [pull]," he wrote in an email, the report stated. Adams' representatives did not respond to Tuesday requests for comment, according to The Washington Post.
The former mayor said Monday he would not initially profit from NYC Token, though he declined to rule out future earnings, The Washington Post reported. At the press conference, Adams directed several token-related questions to its website, which called NYC Token "the future of decentralized finance, powered by the city that never sleeps" – but offered few specifics, the report stated.
TRM Labs vice president Ari Redbord said he could not comment on Adams' motivations or involvement in the token's creation or trading, The Washington Post reported. "When people ask whether this 'looks like a rug pull,' they're referring to whether the blockchain activity shows familiar memecoin risk patterns," including concentrated ownership and rapid post-launch selling, Redbord told The Washington Post via email.
The token's rapid price increase and subsequent collapse was "consistent" with such patterns, he stated, according to the report.
"That does not, by itself, establish intent or wrongdoing by any individual, but it illustrates how quickly value can evaporate in hype-driven token launches when liquidity and ownership are highly concentrated," Redbord added, The Washington Post reported.
In a Monday Fox Business interview, Adams told host Maria Bartiromo that his crypto launch represented efforts "to do everything possible to fight like heck to make sure this city does not go backward," alluding to New York Mayor Zohran Mamdani's administration, which has reversed several Adams policies through executive orders, according to The Washington Post.
"I still believe that this city is the financial capital of the globe, and we're going to see how blockchain technology can actually improve government, not fight against government," Adams told the network, providing few specifics on how private cryptocurrency would enhance governance, the report stated.
Adams – who famously accepted his first mayoral paycheck in bitcoin – is not the first politician to launch a meme coin or invest in the cryptocurrency sector, widely viewed as risky and speculative, according to The Washington Post. President Donald Trump and first lady Melania Trump launched $TRUMP and $Melania coins last spring, with the president later hosting top token purchasers at a black-tie dinner at one of his golf clubs, generating ethical concerns, the report stated.
Adams, a Democrat running as an independent in last year's mayoral race, withdrew his candidacy in September under pressure from Trump allies seeking to consolidate support for former governor Andrew Cuomo, the report stated.
