Concerns are rising within the cryptocurrency community about the NYC token of former New York City mayor Eric Adams, recently launched, after blockchain data revealed a sudden withdrawal of liquidity shortly after launch
This event has led some community members to speculate about the possibility of a rug pull. However, the team clarified that the liquidity movement is part of a balancing process.
What is the NYC Token of former Mayor Eric Adams?
According to media reports, Adams launched the 'NYC Token' during a press event at Times Square on Monday. The former mayor stated that proceeds from this altcoin would be used to combat antisemitism and anti-American sentiment. Additionally, Adams announced the launch on X (formerly known as Twitter).
According to the official project website, NYC Token was created on the Solana blockchain and has a total supply of 1 billion coins. During the token generation event (TGE), 80 million coins will be in circulation.
Additionally, the project has allocated 70% of the total coin supply as the 'NYC Token Reserve,' which will not be included in the circulating supply as planned.
NYCTOKEN ($NYC) is intended as an expression of support and engagement with the ideals and spirit reflected by the $NYC symbol and associated artwork. It is not intended as an investment opportunity, investment contract, or any form of security. NYCTOKEN is not affiliated with, endorsed, or linked to New York City, any government agencies, or official organizations of New York. This is a community-driven project built by independent developers, as stated on the website.
Analysts are expressing concern amid the launch of the NYC coin in the United States.
According to GeckoTerminal data, the coin rapidly appreciated after launch, reaching a market cap exceeding $700 million. However, momentum gradually faded, leading to a sharp price drop and a market cap falling below $100 million.
As of this writing, NYC has rebounded slightly, bringing its market cap back to approximately $128.8 million.
Notably, on-chain analysts have raised warnings about suspicious activity. Blockchain sleuth Rune Crypto alerted the community about a $3.4 million withdrawal from the liquidity pool, indicating a possible scam.
Eric Adams has withdrawn over $3.4 million from his memecoin liquidity pool: now a laughable rug pull, as his net worth is only around $2 million, according to this post.
Additionally, Bubblemaps has highlighted 'suspicious LP activity' related to NYC, where wallet 9Ty4M—linked to the NYC token issuer—created a one-sided liquidity pool on Meteora.
When the token price peaked, that wallet withdrew approximately $2.5 million in USDC. After the price dropped by about 60%, it then injected back around $1.5 million into the pool.
The platform has suggested that the situation of this Solana token resembles the issues previously seen with the LIBRA token, raising concerns about transparency and investor protection in crypto projects linked to politics.
Unfortunately, this situation evokes memories of the $LIBRA launch, which saw heavy liquidity manipulation, as Bubblemaps noted.
Beyond liquidity concerns, analysts have also warned about high centralization. Crypto analyst Star Platinum cautioned that the project's centralized structure poses significant risks to retail holders.
The top 5 wallets alone hold over 92% of the total supply. Withdrawing liquidity would instantly result in a rug pull. Furthermore, multiple fake NYC tokens have been launched simultaneously, creating confusion that aids scammers. Even selling just 10% from the wallets holding 70% could crash the chart. This is not normal distribution, nor a safe market structure. Retail investors are entirely at risk, analysts emphasized.
Nevertheless, the project has responded to blockchain activity concerns by stating that the liquidity movements were part of a balancing process.
The future of the NYC Token likely depends on greater clarity regarding liquidity management. If the project team monitors blockchain activity and communicates updates transparently, it could help build community trust, especially as token activity continues to evolve over the next few weeks.
