Eric Adams has denied allegations that he moved funds or profited from the NYC token after the cryptocurrency plunged more than 80% within the first hour of its launch, fueling accusations of a rug pull across crypto social media.
The Solana-based token, launched earlier this week, briefly surged before suffering a sharp collapse that wiped out hundreds of millions of dollars in market value. Critics quickly pointed to on-chain data suggesting large liquidity withdrawals, while Adams’ representatives insist the claims are false and unsupported.
Adams rejects profit and fund-movement claims
In a Jan. 14 statement posted on X, Adams’ spokesperson Todd Shapiro said reports alleging that Adams moved money out of the NYC token were “false and unsupported by any evidence.” According to Shapiro, the token’s rapid decline was driven by market volatility rather than insider activity.
He added that Adams’ involvement in the project was not intended for personal or financial gain and that the former mayor did not access or move investor funds at any point during the launch.
On-chain data raises questions
Despite the denial, blockchain analysts and community members flagged suspicious activity shortly after trading began. Data shared by on-chain analytics platform Bubblemaps indicated that a wallet linked to the token deployer removed approximately $2.5 million in USDC liquidity near the token’s peak price.
Other analysts estimated that as much as $3.4 million may have been withdrawn from the liquidity pool. At its height, the NYC token reached a market capitalization of roughly $580 million before collapsing to under $130 million within the first hour, intensifying rug pull accusations.
Liquidity “rebalancing” explanation
In response to the allegations, the NYC token account stated that no funds were removed inappropriately and described the activity as a liquidity rebalance. According to the statement, the project used Time-Weighted Average Price mechanisms to manage extreme price volatility during launch.
The team also claimed that liquidity was being added gradually to the pool to reduce market shock, rather than withdrawn for personal benefit. These explanations, however, have failed to fully convince critics in the crypto community.
As of publication, the NYC token was trading around $0.138, a level it has hovered near since falling from its launch-day high.
Purpose and planned use of funds
Speaking during a Fox Business interview, Adams said the NYC token was created to support educational and nonprofit initiatives. He stated that proceeds would be used to raise awareness about antisemitism and anti-Americanism, fund blockchain and crypto education programs, and provide scholarships for students in underserved communities.
“The NYC Token is designed as a free, voluntary way to support educational and nonprofit efforts,” Shapiro said, adding that Adams remains committed to responsible innovation and the use of emerging technologies to strengthen civic trust and shared values.
Ongoing scrutiny
While Adams and his team continue to deny any wrongdoing, the episode highlights ongoing concerns around high-profile token launches, transparency, and liquidity management. As investigators and analysts continue to review on-chain data, the NYC token’s collapse is likely to remain under close scrutiny from both regulators and the crypto community.
