Concerns are rising within the cryptocurrency community over the newly launched NYC token by the former mayor of New York, Eric Adams. On-chain data indeed showed that a significant amount of liquidity was removed immediately after the launch.
This led some community members to speculate about the possibility of a rug pull. However, the team stated that the liquidity movements were part of a process to restore balance.
What is the NYC token of former mayor Eric Adams
According to media reports, Adams unveiled the "NYC Token" during a press event in Times Square on Monday. The former mayor said the proceeds from the altcoin would be used to combat antisemitism and anti-American sentiments. Adams also announced the launch on X (formerly Twitter).
According to the project's official website, the NYC Token runs on the Solana blockchain. There are a total of 1 billion tokens. During the token generation event (TGE), 80 million tokens were brought into circulation.
Additionally, 70% of the total supply has been moved to a "NYC Token Reserve," and these tokens are not part of the planned circulating supply.
"NYCTOKEN ($NYC) is intended as an expression of support for, and engagement with, the ideals and spirit of the symbol '$NYC' and its associated artwork. It is not intended as an investment opportunity, investment contract, or any kind of financial instrument. NYCTOKEN has no affiliation with, is not approved by, or connected to New York City, any government authority, or official organization in New York. This is a community project by independent developers," reads the website.
Analysts express concerns about the debut of the NYC token
Data from GeckoTerminal shows the token surged significantly right after launch, reaching a market capitalization of over $700 million. However, the momentum quickly faded, causing the price to plummet and market value to drop below $100 million.
As of writing, NYC had partially recovered, with market capitalization rebounding to approximately $128.8 million.
Interestingly, on-chain analysts raised alarms about suspicious activities. Blockchain investigator Rune Crypto warned the community that $3.4 million in liquid assets had been removed from the pool, which could indicate a potential scam.
"Eric Adams has already withdrawn more than $3,400,000 from the liquidity pool of his memecoin: it is now a rug pull. Ironically, his own net worth was only $2,000,000," stated the post.
Bubblemaps also highlighted "suspicious LP activity" around NYC. A wallet, 9Ty4M, linked to the NYC token deployer, created a one-sided liquidity pool on Meteora.
At the peak of the token, this wallet withdrew approximately $2.5 million in USDC from the pool. Afterwards, around $1.5 million was added back after the price dropped by more than 60%.
The platform stated that the situation surrounding this Solana token resembles issues seen with the LIBRA token. This has raised questions about transparency and investor protection in politically connected cryptocurrency projects.
"This unfortunately brings to mind the $LIBRA launch, where liquidity was also heavily manipulated," wrote Bubblemaps.
In addition to liquidity issues, analysts also pointed to strong centralization. Crypto analyst Star Platinum warned about the centralized nature of the project and the risks it poses to retail holders.
"The top 5 wallets alone: over 92% of the supply. If LP is removed → immediate rug pull. Multiple fake NYC tokens launched simultaneously → confusion helped scammers. Even a 10% sell-off from the 70% wallet would crash the chart. This is not a normal distribution. This is not a safe market structure. Retail is fully exposed," emphasized the analyst.
Still, the project responded to the mentioned on-chain activity by stating that the liquidity movements were part of a balance restructuring.
Looking ahead, the development of the NYC Token will likely depend on greater clarity around liquidity management. Ongoing on-chain monitoring and transparent communication from the project team can help alleviate community concerns as the token's market activity evolves over the coming weeks.
