Synopsis: Ex-NYC Mayor Eric Adams denies rug-pull allegations after his NYC Token crashed 80% on launch, losing $400M in market cap amid liquidity withdrawal claims and controversial ties.
Former New York City Mayor Eric Adams faces mounting scrutiny after his newly launched cryptocurrency token crashed spectacularly within hours of its debut. The NYC Token plummeted 80% shortly after Monday’s launch, triggering widespread allegations of misconduct. However, Adams and his team vehemently deny removing investor funds or profiting from the controversial venture.
Todd Shapiro, Adams’ spokesperson, issued a forceful rebuttal on Wednesday. He stated that Adams neither moved investor funds nor profited from the token launch. Moreover, Shapiro emphasized that no funds were removed from NYC Token at any point. The spokesperson described allegations of a potential rug-pull as “false and unsupported by evidence.” He attributed the dramatic price collapse to market volatility rather than any wrongdoing.
Token’s Dramatic Fall Sparks Investor Outrage
The Solana-based NYC Token saw its value peak at around 50 cents before crashing to less than 9 cents. Crypto analysts quickly raised red flags about suspicious activity surrounding the token’s liquidity pool. Social media erupted with angry investors claiming they lost money in what appeared to be a coordinated scheme.
Bubblemaps, a crypto analytics firm, reported that a wallet withdrew $2.5 million from the liquidity pool shortly before the collapse. Approximately $1.5 million was later returned to the pool. This activity fueled speculation that Adams or his team orchestrated a rug-pull, scamming investors out of over $3.4 million. The token currently trades at $0.133, having lost over $400 million in market capitalization since its early highs.
Conflicting Statements Add to Confusion
The NYC Token team’s explanation appears to contradict Shapiro’s claims. The official NYC Token account on X stated that it “rebalanced the liquidity” in response to unexpected demand. Additionally, the team said it added more funds to the liquidity pool to maintain trading operations.
Elissa Buchter, a spokesperson for NYC Token, defended the project’s actions in a statement. She explained that their market maker adjusted liquidity to keep trading running smoothly. Furthermore, Buchter emphasized that the team has not sold any tokens and remains subject to lockups and transfer restrictions. She categorically denied that any money was withdrawn from the account.
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Controversial Connections Emerge
Public records reveal connections between NYC Token and Sefi Zvieli, a Brooklyn landlord with a controversial history. Documents show that Zvieli signed the certificate of formation for C18 Digital LLC, an entity mentioned in NYC Token’s terms of service. This Delaware-based company was created on December 30, just weeks before the token launch.
Zvieli previously made headlines for securing a lucrative city-backed homeless shelter deal worth $3.5 million annually. He obtained this contract after hiring Frank Carone, a lawyer with close ties to Adams. The arrangement drew criticism when reports surfaced describing the property as “filthy, fetid, and dangerous.” Neither Zvieli nor Carone responded to requests for comment about their involvement with NYC Token.
Adams Maintains Commitment to Educational Goals
Despite the backlash, Adams insists the token serves a charitable purpose. He explained that proceeds would fund blockchain education programs for underserved New York City students. Additionally, the initiative aims to raise awareness about antisemitism and anti-Americanism through educational efforts. Shapiro confirmed that the controversy has not changed Adams’ commitment to these objectives.
Adams promoted NYC Token at a Monday press conference without disclosing his partners or project details. He stated he was not drawing a salary from the venture yet. Notably, Adams twice referred to blockchain technology as “blockchange” during interviews. The former mayor was known for his crypto-friendly stance, having previously converted portions of his paychecks to bitcoin.
This isn’t Adams’ first cryptocurrency controversy. He previously promoted “NYCCoin” early in his mayoralty, which ultimately failed. Trading on that token dried up completely, and the city reportedly disavowed it before its delisting in 2023. The pattern raises questions about Adams’ judgment regarding cryptocurrency ventures and their potential impact on public trust.
Written By Fazal Ul Vahab C H
