Quick Take

Former New York City Mayor Eric Adams pushed back against allegations that his newly launched memecoin, NYC Token, involved suspicious liquidity withdrawals that cost investors millions of dollars.

"Recent reports alleging that Eric Adams moved money out of the NYC Token are false and unsupported by any evidence," Todd Shapiro, spokesperson representing Adams, stated Tuesday in a message posted to Adams' X account. 

The statement said that Adams did not move investor funds and did not profit from the token's launch, and that "no funds were removed from the NYC Token."

The spokesperson framed the token's instability as typical of early-stage crypto assets. "Like many newly launched digital assets, the NYC Token experienced market volatility," Shapiro said.

The statement came after the NYC Token project itself acknowledged that it had to "rebalance" liquidity. 

"Given the overwhelming support and demand for the token at launch, our partners had to rebalance the liquidity," the NYC Token said Wednesday on X. "We are aware of reports flagging the transactions removing liquidity from the pool. The team commenced the funds for TWAP and added additional funds to the liquidity pool."

The dual statements attempt to address a flurry of blockchain analysis raising questions about onchain activity linked to the NYC token's launch, which saw a sharp drawdown that some industry observers suggested resembled a liquidity drain.

One of the earliest warnings came from Rune Crypto, who warned that roughly $3.4 million in liquidity had been withdrawn shortly after launch, accusing the project of being a rugpull scheme.

Onchain trading visualization platform Bubblemaps also flagged unusual liquidity activity around the token. It pointed out that a wallet (9Ty4M), which is connected to the token deployer, removed roughly $2.5 million in USDC at the market peak and later added back about $1.5 million after the token price had dropped more than 60%.

In a follow-up post, Bubblemaps quantified the scale of losses among NYC Token participants. Out of roughly 4,300 traders, an estimated 60% lost money during the token's volatile first few hours. There was a broad disparity in losses: most affected traders lost less than $1,000, while about 200 traders lost between $1,000 and $10,000. A smaller group saw losses in the tens of thousands, and at least fifteen traders lost more than $100,000.

Transparency concerns

Adams' latest statement argued that the NYC Token was intended as a tool to support nonprofit causes and community education, not as an investment vehicle. But the token's erratic market behavior fueled uncertainty over its structural integrity and governance.

The project's website states that the token is deployed on Solana with a total supply of 1 billion. It also says that 70% of the supply would be allocated to what it calls a "NYC Token Reserve" and would not be included in the planned circulating supply.

While the project said its partners had to rebalance liquidity during the volatile launch period, the website has yet to provide a detailed list of those partners.

The Block has reached out to Adams for further comment.