Concerns in the crypto community are growing over former New York City mayor Eric Adams' new NYC Token. On-chain data showed that liquidity was rapidly withdrawn immediately after the launch.
This led some in the community to speculate it could be a rug pull. However, the team clarified that these movements were related to a reallocation of liquidity.
What is former New York City mayor Eric Adams' NYC Token?
According to media reports, Adams introduced the "NYC Token" at a press event in Times Square on Monday. The former mayor stated that proceeds from the altcoin would go toward projects combating antisemitism and anti-American views. Adams also announced the launch on X (formerly Twitter).
The project's official website states that NYC Token is built on the Solana blockchain. It has a total supply of 1 billion. At the token generation event (TGE), there were 80 million tokens in circulation.
The project has additionally set aside 70% of the total supply in a "NYC Token Reserve" that will not be part of the planned circulation.
"NYCTOKEN ($NYC) is intended as a way to show support for, and engagement with, the values and spirit behind the symbol "$NYC" and associated artwork. It is not meant to be, nor become, any form of investment or security. NYCTOKEN has no affiliation with, or support from, the city of New York, any authorities, or official organizations in New York City. This is a project driven by independent developers," the website states.
Analysts express concern regarding the launch of NYC Token
Data from GeckoTerminal shows the token surged sharply right after launch and reached a market cap of over $700 million. But the momentum quickly vanished. The price fell, and the value dropped below $100 million.
At the time this text was written, NYC had somewhat recovered and the market cap was around $128.8 million.
On-chain analysts were also concerned about suspicious activities. Blockchain investigator Rune Crypto warned that $3.4 million had been withdrawn from the liquidity pool, suggesting it could be a pump and dump.
"Eric Adams has now withdrawn over $3,400,000 from the liquidity pool for his memecoin: it's practically a rug pull. Ironically, his own fortune was only around $2,000,000," read the post.
Bubblemaps also highlighted "suspicious LP activity" around NYC. A wallet 9Ty4M, linked to NYC token's developers, created a one-sided liquidity pool on Meteora.
When the token price peaked, the wallet withdrew approximately $2.5 million in USDC. Later, the wallet returned around $1.5 million after the value dropped by about 60%.
The platform showed similarities to the issues faced by the LIBRA token. This raises questions about transparency and investor protection in political crypto projects.
"This unfortunately resembles the launch of $LIBRA, where liquidity was also heavily manipulated," wrote Bubblemaps on X.
In addition to liquidity issues, analysts also pointed to excessive centralization. Crypto analyst Star Platinum warned about the project's highly centralized structure and the risks for ordinary users.
"The five largest wallets hold over 92% of the supply. If LP is withdrawn, it will be an immediate rug pull. Several fake NYC tokens were launched simultaneously — creating confusion that helped scammers. If the 70%-wallet sells 10%, the price will crash. This is not a normal distribution and certainly not a safe market condition. Regular investors bear all the risk," noted the analyst.
Despite this, the project responded to criticism. The team stated that the liquidity movements were due to rebalancing.
Going forward, NYC Token will likely need greater transparency regarding how liquidity is managed. Ongoing scrutiny and clear communication from the project team can help alleviate concerns within the community as the token's market develops over the coming weeks.
