Eric Adams, the former mayor of New York City, is under fire from the crypto community following allegations of a “rug pull” scheme involving a newly launched memecoin he promoted.
CoinDesk reports that Eric Adams, the former mayor of New York City, now finds himself at the center of controversy after promoting a memecoin that experienced suspicious liquidity withdrawals shortly after its launch. The incident has raised serious questions about the former mayor’s involvement in what many traders are calling a potential “rug pull” scam. In a crypto rug pull, a new crypto coin is aggressively promoted, then insiders suddenly withdraw their funds from the project, leaving those that purchased the coins with a worthless asset.
Adams unveiled the NYC Token during a press event held in Times Square on Monday, presenting it as a cryptocurrency project designed to support civic causes. The token generated immediate interest from retail traders and market observers, with its market capitalization rapidly climbing to $580 million shortly after becoming available for trading. The dramatic surge indicated substantial demand and enthusiasm from the cryptocurrency community.
However, the excitement proved short-lived. Within just hours of the launch, blockchain analytics revealed large-scale liquidity movements that prompted concerns about the token’s structure and management practices. Data shared by blockchain analytics firm Bubblemaps and other independent researchers uncovered that a digital wallet connected to the token’s insiders withdrew approximately $2.5 million near the market’s highest point.
The timing of the withdrawal raised immediate red flags throughout the crypto trading community. Following the initial liquidity removal, roughly $1.5 million was later returned to the liquidity pool, but only after the token’s price had already declined by more than 60 percent. Notably, approximately $900,000 in USDC was never returned to the pool, according to on-chain tracking systems that monitor blockchain transactions.
These liquidity movements triggered widespread accusations of a rug pull, a term commonly used in cryptocurrency circles to describe situations where project creators or insiders remove liquidity from a token’s trading pool. This action typically leaves traders unable to sell their holdings without experiencing substantial financial losses, as the lack of liquidity causes dramatic price collapses.
According to information provided on the token’s official website, NYC Token has a total supply of one billion coins. The distribution model allocates 70 percent of the supply to a reserve that remains excluded from the circulating supply available to traders. This concentration of tokens raised additional concerns among cryptocurrency analysts about potential centralization and control issues.
During the announcement, Adams stated that proceeds from the token would be directed toward funding efforts to combat antisemitism and what he described as anti-Americanism through an unidentified nonprofit organization. However, the former mayor did not reveal the identities of any co-founders involved in the project, nor did he provide detailed information explaining how the funds would be managed or distributed.
In an interview with Fox Business anchor Maria Bartiromo, Adams offered responses that many observers characterized as confusing and lacking substance when questioned about the token’s intended use case and practical applications. During the interview, Adams attempted to draw comparisons between blockchain technology and corporate applications.
The interview also featured several notable verbal mistakes from the former mayor. Adams incorrectly referred to blockchain technology as block change technology on two separate occasions during the conversation with Bartiromo. Additionally, Adams appeared to confuse NYC Token with a different cryptocurrency project that had a similar name.
Read more at CoinDesk here.
Lucas Nolan is a reporter for Breitbart News covering issues of free speech and online censorship.
Read the full article here