Eric Adams, who stepped down as mayor of New York City two weeks ago, made a high-profile entrance into the crypto world with the launch of his own token, NYC.
Less than 24 hours later, more than half of the 4,300 traders who bought the token were back at a loss. The project quickly took on the characteristics of a meme coin, and analysts described the event as a classic example of a rug pull scenario.
The unexpected comeback of political meme coins
Most people believed that 2025 marked the end of the meme coin wave.
After a series of high-profile launches by sitting presidents that ended in losses of hundreds of thousands of dollars, the narrative lost strong support from private traders.
Yet it appears Eric Adams managed to revive the trend before it vanished completely. On Monday, the former New York mayor announced the launch of the NYC token on social media.
Adams emphasized that it was created to "combat the rapid spread of antisemitism and anti-Americanism."
However, the launch ended in significant losses for most traders. NYC quickly reached a market value of $600 million before crashing below $100,000.
After seeing such situations repeated multiple times earlier, the crypto community soon began searching for insider trading.
On-chain data provides evidence for insider allegations
A follow-up analysis from the blockchain analytics platform Bubblemaps revealed that a wallet linked to the token's developer withdrew approximately $2.5 million in USDC from the liquidity pool supporting the trade, precisely when the price of NYC was at its peak.
When the token dropped by 60%, the creators behind NYC injected tokens worth $1.5 million back into the pool.
"The NYC wallet returned some of the funds to the liquidity pool and placed two large buy orders ($200,000 and $300,000) to make small purchases every 60 seconds. These movements, in addition to being suspicious, were not communicated in advance and created significant distrust," said Blockworks blockchain analyst Fernando Molina to BeInCrypto.
The maneuver also did little to recover the price. What happened to the remaining $1 million remains unclear.
Meanwhile, investors were left picking up the pieces.
On Wednesday, Bubblemaps revealed that 60% of the 4,300 traders who invested in the token lost money. Over half lost less than $1,000, while others suffered larger losses. Fifteen of them lost over $100,000.
By analyzing the launch, Molina compared the event to famous rug pulls such as the LIBRA token launched by Argentina's president Javier Milei in February last year.
"From a technical perspective, there were many similarities: the way the liquidity pool (the market where NYC or LIBRA can be traded) was created had unique characteristics not commonly seen in such launches (single-sided liquidity pools)," he said. "There is no clear indication that it was the same team, but the similarities are striking."
Yet Adams quickly faced accusations of being an insider.
Adams denies allegations under investigation
On Wednesday, Todd Shapiro, spokesperson for Adams, issued a statement responding to the rug pull allegations.
"Recent reports claiming that Eric Adams moved funds out of the NYC token are false and unsupported by any evidence," the statement said. "His involvement was never intended for personal or financial gain."
The statement also noted that the project, like many new tokens, experienced significant early volatility.
Yet the explanation did little to ease scrutiny of Adams, who has played a distinctive role in the crypto space.
As mayor of New York City, Adams built a reputation as a vocal supporter of cryptocurrency and often spoke passionately about Bitcoin and blockchain technology. Even before taking office, he announced plans to receive his first three mayoral salaries in Bitcoin.
His term, however, was marked by controversies. It was marred by corruption allegations and record-low approval ratings, making re-election difficult for Adams.
Like U.S. President Donald Trump, who tried to gain support from the crypto lobby ahead of his own re-election campaign, Adams continued to position himself as a pro-crypto politician. However, this strategy failed to secure him a second term.
Even with this, the launch of the NYC token marked the first time Adams personally introduced a crypto project. So far, it has been a tough start.